Extension of Time to Assess Deficiencies for Section 507(b)(1)(B) Terminations

(1) When a private foundation files a notification of its intent to begin a 60-month

termination pursuant to Section 507(b)(1)(B) and does not request an advance ruling, it may also elect to extend the period of limitation within which it may be assessed Section 4940 tax for any taxable year within the 60-month termination period by filing Form 872-B, Consent to Extend the Time to Assess Miscellaneous Excise Taxes. See Treas. Reg. 1.507-2(b)(7).

(2) The filing of the Form 872-B is optional for an organization not requesting an

advance ruling. If an organization chooses not to submit the form it must pay taxes on its Section 4940 taxable income during the period. When the organization successfully accomplishes a 60-month Section 507(b)(1)(B) termination then it can file a claim for refund of the tax paid during the 60-month period. However, if a consent which would prevent the period of limitations for all years in the 60-month period from expiring is not in effect, in order to be able to file a claim for refund for a specific year in which the period of limitation would have expired, the foundation must agree to extend the period of limitation for all taxes imposed under Chapter 42. See Treas. Reg. 1.507-2(b)(7) and Treas. Reg. 1.507-2(e)(3).