Change to 2013 private foundation reporting for grants
Stay informed on the new reporting requirement the 2013 Form 990-PF
TAX ALERT |
There is a new requirement for the 2013 Form 990PF that may impact the data private foundations are collecting and evaluating on grantees. If a private foundation has already collected this data, it will need to ensure it captures and reports the additional information now required for the return.
Below is a snapshot of the Form 990-PF, Part XV, Grants and Contributions Paid During the Year or Approved for Future Payment. In the column labeled, “Foundation status of recipient,” the IRS has added language specificity around the required reporting. Many private foundations currently indicate "501(c)(3)" or “PC” for public charity, or do not include this information on their attachments.
The IRS has added a new information disclosure requirement to the instructions that requires a private foundation is to list out, using a series of codes, the exact public charity status claimed for each grant highlighted in Part VI. The rationale for this expansion in information reporting is based on (1) certain organizations requiring additional monitoring procedures, and (2) the fact that private foundations are sometimes prohibited from making grants to certain types of entities.
Obviously, this change will help the IRS better identify violations of the strict private foundation distribution rules. As a part of its tax reform initiatives, the IRS is pushing for e-filing for all Form 990 series returns, which include the Forms 990-PF filed by private foundations.
Part XV – Supplementary information (continued)
Grants and Contributions Paid During the Year or Approved for Future Payment
|Recipient||If recipient is an individual, show any relationship to any foundation manager or substantial contributor||Foundation status of recipient||Purpose of grant or contribution||Amount|
|Name and address (home or business)|
|Paid during the year|
The instructions provide the following table to be used in populating “Foundation status of recipients” of grants from a private foundation on its return:
Foundation Status of Recipient
Use the following codes:
|NC||Non-charity (not 501(c)(3))|
|PF||Private non-operating foundation (section 509(a))|
|POF||Private operating foundation (section 4942(j)(3)) other than an EOF|
|EOF||Exempt operating foundation (section 4940(d))|
|PC||Public charity described in section 509(a)(1) or (2)|
|SO-DP||Type I, type II, or type III functionally integrated supporting organization if a disqualified person of the private foundation controls the supporting organization or a supported organization (sections 509(a)(3) and 4942(g)(4))|
|SO I||Type I supporting organization (sections 509(a)(3) and 509(a)(3)(B)(i)) other than an SO-DP|
|SO II||Type II supporting organization (sections 509(a)(3) and 509(a)(3)(B)(ii)) other than an SO-DP|
|SO III FI||Functionally integrated type III supporting organization (sections 509(a)(3), 509(a)(3)(B)(iii), and 4943(f) (5)(B)) other than an SO-DP|
|SO III NFI||Non-functionally integrated type III supporting organization (sections 509(a)(3), 509(a)(3)(B)(iii), and 4943(f) (5)(B))|
|TPS||Testing for public safety organization (section 509(a)(4))|
With this expansion in reporting on the Form 990-PF return, private foundation management should begin work now to develop internal processes to capture the information that must be reported on the return for 2013 and future years.
Private foundations should contact their tax advisors to discuss the implications of this new reporting requirement.
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