Part II. Enter in column (a) the names of all fund managers

who agreed to make the taxable distribution. If more than one fund manager is listed in column (a) for one distribution, each is individually liable for the entire tax in connection with that distribution. However, the fund managers who are liable for the tax may prorate the payment among themselves. Enter in column (c) the tax each manager will pay for each distribution for which such manager owes a tax.

A fund manager filing this Form 4720 should carry the apportioned amount in column (d) to Part II, line 8.

General Instructions

Requirement. A sponsoring organization of donor advised funds that answered “Yes,” to Form 990, Part V, line 9b, or that otherwise distributed prohibited benefits under section 4967, must complete Schedule L. In addition, a donor, donor advisor, or related party that (1) advised a distribution that provided a prohibited benefit under section 4967, or (2) that received such a benefit, and any fund manager who agreed to the distribution knowing that it would confer a prohibited benefit, must complete Schedule L. Report each distribution separately. Complete Parts I, II, and III of Schedule L only in connection with distributions made by a sponsoring organization from a donor advised fund which results in a prohibited benefit. (See the instructions for Schedule K for definitions of the terms “sponsoring organization” and “donor advised fund.”) An organization reporting a prohibited benefit on Schedule L is not liable for the tax and should not report any tax amount on Part II, line 9.

Prohibited benefit. If any donor, donor advisor, or related party advises the sponsoring organization about making a distribution which results in a donor, donor advisor, or related party receiving (either directly or indirectly) a more than incidental benefit, then such benefit is a prohibited benefit.

Donor advisor. A donor advisor is any person appointed or designated by a donor to advise a sponsoring organization on the distribution or investment of amounts held in the donor's fund or account.

Related party. A related party includes any family member or 35% controlled entity. See the General Instructions for Schedule I, earlier, for a definition of those terms.

Tax on donor, donor advisor, or related person. A tax of 125% of the benefit resulting from the distribution is imposed on both the party who advised as to the distribution (which might be a donor, donor advisor, or related party) and the party who received such benefit (which might be a donor, donor advisor, or related party). The advisor and the party who received the benefit are jointly and severally liable for the tax.

Tax on fund managers. If a tax is imposed on a prohibited benefit received by a donor, donor advisor, or related person, a tax of 10% of the amount of the prohibited benefit is imposed on any fund manager who agreed to the distribution knowing that it would confer a prohibited benefit. Any fund manager who took part in the distribution and is liable for the tax must pay the tax. The maximum amount of tax on all fund managers for any one taxable distribution is $10,000. If more

than one fund manager is liable for tax on a taxable distribution, all such managers are jointly and severally liable for the tax.

Exception. If a tax is imposed under section 4958 for the same transaction, then no additional tax is imposed under section 4967 on that transaction.

Specific Instructions