What IRS Form 990-PF (2023) Is For

Form 990-PF is the annual return required for all private foundations and certain non-exempt charitable trusts treated as private foundations. This form serves two main purposes: calculating and paying excise tax on the foundation's investment income (currently 1.39% of net investment income), and reporting charitable distributions and activities to demonstrate compliance with minimum payout requirements (IRS Instructions for Form 990-PF (2023)).

When You’d Use Form 990-PF for 2023 (Late or Amended Filing)

You might be filing a late 2023 Form 990-PF if you received IRS notices about missing returns, or if your foundation failed to meet the original May 15, 2024 deadline. Late filings often result from management changes, operational disruptions, or overlooked compliance. If correcting information—such as charitable distributions, investment income, or manager details—file an amended return by checking “Amended return” in Item G and submitting a complete corrected form (IRS Instructions for Form 990-PF (2023)).

Key Rules Specific to 2023

• Excise tax rate: The 1.39% flat excise tax rate applied to net investment income.
  
  
• Mandatory electronic filing: All 2023 returns had to be filed electronically; paper returns were not accepted.
  
  
• Minimum distribution requirement: Private foundations were required to distribute approximately 5% of their average non-charitable assets or face a 30% excise tax penalty on undistributed income.
  
  

Step-by-Step (High Level)

• Gather records: Obtain IRS transcripts using Form 4506-T, along with financial statements and grant documentation.
• Use correct form: Complete the 2023 version of Form 990-PF only.
• Attach schedules: Include all necessary schedules, such as grant details, balance sheets, or Form 4720 if excise tax applies.
• File electronically: Submit via IRS-approved e-file providers—paper filing is not permitted.
• Keep records: Retain digital and physical copies for public inspection and compliance purposes.

Common Mistakes and How to Avoid Them

• Using the wrong year’s form: Always file using the 2023 version, not current-year forms.
  
  
• Incomplete grant reporting: Ensure Part XI properly details all qualifying distributions.
  
  
• Investment income errors: Include dividends, interest, and capital gains in net investment income calculations.
  
  
• Minimum distribution errors: Miscalculations in Part X may lead to excise taxes.
  
  
• Amendment record-keeping gaps: Always reflect prior taxes or refunds when amending.
  
  
• Improper filing: Avoid paper submissions—electronic filing is mandatory.
  
  

What Happens After You File

The IRS typically processes electronic returns within several months, while amended filings may take longer. You’ll receive acknowledgment shortly after submitting electronically. If additional taxes are owed, payment plans may be requested using Form 9465. The IRS may issue notices for clarification or adjustments. Interest continues to accrue on unpaid balances, and you retain appeal rights if you disagree with IRS findings.

FAQs

What are the penalties for filing my 2023 Form 990-PF late?

The penalty is $20 per day for foundations with gross receipts under $1,208,500 and $120 per day for larger foundations, capped at $12,000 and $60,000 respectively. Penalties continue until the return is filed. Additionally, responsible individuals can face $10 daily penalties up to $5,000. Filing quickly minimizes long-term compliance risks and financial exposure.

How long do I have to file an amended 2023 return?

Amended returns can be filed anytime to correct mistakes or omissions. However, if you’re seeking a refund of overpaid excise taxes, you must file within three years of the original due date or two years from the payment date, whichever is later. Prompt filing ensures accurate reporting and helps maintain compliance with IRS and state requirements.

Can I get account transcripts for my foundation’s 2023 tax year?

Yes. Submit Form 4506-T to request IRS account transcripts for 2023. These transcripts will confirm filing history, payments, and penalties. While not mandatory, they provide useful insights before filing a late or amended return. They also help identify discrepancies between your internal records and IRS records, reducing the risk of errors or duplicate filings.

Do I need to file electronically for a late 2023 return?

Yes. All 2023 private foundation returns must be filed electronically, regardless of size or timing. The IRS no longer accepts paper Form 990-PF for 2023 filings. Filing electronically ensures faster processing, immediate acknowledgment of receipt, and fewer clerical errors. Always use IRS-approved e-file software or a qualified tax professional for submissions.

What if I discover I owe excise tax on undistributed income from 2023?

If your foundation failed to meet its 5% payout requirement, you must calculate the undistributed income and report it using Form 4720. A 30% excise tax applies to the undistributed amount. Filing promptly helps reduce potential penalties, and corrective distributions in subsequent years may reduce or offset the liability if properly documented.

Should I file amended state returns if I’m correcting my federal 990-PF?

Yes, most states that receive or rely on Form 990-PF require amended filings if you submit an amended federal return. State attorney general or charity registration offices may mandate this. Failing to amend state records can jeopardize your ability to solicit contributions or remain in compliance with state-level nonprofit requirements. Always confirm with local regulators.

How do I know if my foundation met the 2023 minimum distribution requirement?

You must calculate 5% of the average fair market value of your foundation’s non-charitable use assets for 2023, using Part IX of the return. Then, compare this with your qualifying distributions in Part XI. If distributions fall short, a 30% excise tax applies. Proper planning and documentation help ensure compliance and avoid costly penalties.

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