V. Payment of Section 4940 Tax During Section 507(b)(1)(B) Termination

An organization terminating its private foundation status under section 507(b)(1)(B) may file Form 990-PF without paying the section 4940 tax based on investment income if it filed a consent under section 6501(c)(4) with its notice of termination prior to the start of the 60-month period. The consent provides that the period of limitation on the assessment of tax under chapter 42, based on investment income for any tax year in the 60-month period, won't expire until at least 1 year after the period for assessing a deficiency for the last tax year in which the 60-month period would normally expire. Any foundation not paying the tax when it files Form 990-PF must attach a copy of the signed consent.

If the foundation didn't file the consent, the tax must be paid in the normal manner as explained in O. Figuring and Paying Estimated Tax and P. Tax Payment Methods for Domestic Private Foundations , earlier. The organization may file a claim for refund after completing termination or during the termination period. The claim for refund must be filed on time and the organization must supply information establishing that it qualified as a public charity for the period for which it paid the tax.