IRS Form 990-PF (2018): Return of Private Foundation
What IRS Form 990-PF (2018) Is For
Form 990-PF is the annual information return for private foundations and certain charitable trusts. All private foundations, including exempt and taxable ones, as well as section 4947(a)(1) charitable trusts treated as private foundations, must file it each year regardless of income level. The form reports financial activity, charitable distributions, and compliance with federal rules, while also calculating the excise tax on net investment income under section 4940 (IRS Instructions for Form 990-PF (2018)).
When You’d Use Form 990-PF for 2018 (Late or Amended Filing)
You would file a late 2018 Form 990-PF if your foundation missed the original May 15, 2019 deadline (for calendar-year filers) or its extension. Common late filing scenarios include:
- IRS notices for delinquent returns (e.g., CP-series letters).
- Discovery of unfiled returns during audits or compliance reviews.
- Correction of distribution or investment reporting to meet regulatory requirements.
You would file an amended 2018 return if:
- You understated net investment income or distributions.
- You omitted required schedules or governance disclosures.
- You need to adjust excise taxes or correct public reporting errors.
Unlike refund-driven tax returns, there is no strict refund statute of limitations for Form 990-PF, but corrections should be made promptly to maintain compliance and accurate public disclosure.
Key Rules Specific to 2018
- Excise tax rates: 2% on net investment income, with the option for a reduced 1% rate if the foundation met the charitable distribution test under §4940(e).
- New excise tax rules:
- Section 4960 imposed excise taxes on compensation over $1 million and excess parachute payments to covered employees.
- Section 4943(g) provided exceptions for excess business holdings in certain wholly owned and independently operated enterprises.
- First year of GILTI (Global Intangible Low-Taxed Income) inclusions (§951A) and §965 repatriation income for foreign subsidiaries.
- Section 4960 imposed excise taxes on compensation over $1 million and excess parachute payments to covered employees.
- Minimum distribution: 5% of average net investment assets had to be distributed for charitable purposes.
- Late filing penalties: $20 per day (up to $10,000 or 5% of receipts), or $100/day up to $51,000 for large foundations.
- Electronic filing: Required only for filers of 250+ returns; smaller foundations could still file by paper.
Step-by-Step (High Level)
- Gather records: Request transcripts (Form 4506-T) and collect financials, board minutes, grant records, and prior filings.
- Prepare correct-year form: Use the official 2018 version of Form 990-PF, not a later version.
- Complete excise tax sections: Calculate 2% or 1% tax rate in Part VI.
- Verify distributions: Ensure the 5% payout is accurately calculated in Part XII.
- Attach required schedules: Include Schedule B (contributors), supporting statements, and, if needed, Form 4720 (for excise taxes on violations) or Form 8992 (for GILTI).
- File return: Mail to IRS Ogden, UT, or e-file if required. Mark “Amended return” in Item G if applicable.
- Keep copies: Retain complete returns, attachments, and IRS correspondence for at least three years for public inspection and compliance.
Common Mistakes and How to Avoid Them
- Excise tax miscalculation: Verify whether your foundation qualifies for the 1% reduced rate; don’t default to 2%.
- Distribution requirement errors: Properly calculate 5% minimum payout and carryovers using fair market values.
- Leaving blanks: Always enter zero or “N/A” where required; incomplete answers delay processing.
- Confidential data: Never include Social Security Numbers; these forms are public record.
- Omitting state filings: Provide copies to required state attorneys general where applicable.
- Inconsistent accounting: Apply cash or accrual consistently throughout.
- Missing attachments: Attach explanations for all “Yes” answers in compliance sections.
What Happens After You File
- Processing time: 4–6 months, longer for late or amended filings.
- IRS notices: Expect CP or balance-due notices for penalties, interest, or missing data.
- Penalties:
- $20/day ($100/day for large filers) capped at $10,000 ($51,000 for large filers).
- Failure-to-pay penalties at 0.5% per month on unpaid excise tax.
- $20/day ($100/day for large filers) capped at $10,000 ($51,000 for large filers).
- Payment options: Pay via EFTPS, credit card, or request an installment plan (Form 9465).
- Appeals: If penalties are assessed, you may request reasonable cause relief or appeal IRS determinations.
- Public record: Filed forms are publicly available via the IRS and must be disclosed to state regulators.
FAQs
Q: Can I still request penalty relief for a late 2018 Form 990-PF?
A: Yes. Submit a reasonable cause statement citing illness, disaster, or other uncontrollable events. Relief is discretionary.
Q: How do I calculate interest on unpaid 2018 excise taxes?
A: Interest accrues from the original due date, based on quarterly IRS rates. The IRS usually calculates this, but you can verify with transcripts.
Q: Do I need transcripts before filing late?
A: Not required but helpful. They confirm penalties assessed and prior filing history.
Q: Is there a deadline for amending?
A: No hard deadline, but corrections should be made promptly to preserve compliance. Refund claims follow the 3-year/2-year rule.
Q: Should I also amend state filings?
A: Yes, many states require amended returns if the federal Form 990-PF is amended.
Q: Can I e-file a late 2018 Form 990-PF?
A: Yes, but only if your foundation meets e-file requirements. Smaller filers could still submit paper in 2018.
Q: What if my foundation lost tax-exempt status for non-filing?
A: File all missing returns and apply for reinstatement. Until then, the foundation is treated as a taxable private foundation.
