Knowledgebase

Are nonprofits subject to excise taxes? (FAQ)


Yes, in some cases.

Private foundations, except for operating foundations, are subject to a 1-2% excise tax on their net investment

income.

Public charities and other organizations can be subject to excise taxes for lobbying (if exceed maximum permissible

amounts), political expenditures, self-dealing, excess benefit transactions, etc. These organizations must complete

IRS Form 4720 (Return of Certain Excise Taxes on Charities and Other Persons Under Chapters 41 and 42 of the Internal

Revenue Code).

Questions 89a-d on Part 6 of the Form 990 capture the amounts of the taxes EXCLUDING private foundation excise taxes.

In FY 2001, only 15-19 organizations reported amounts in any of these fields. (A range is given since some of the

numbers appear to be inconsistent with one another.) The total amount of taxes collected was $307,000.

KEYWORDS: ILLEGAL ACTIVITIES


Added 02/25/2005 by tpollak, Modified 04/07/2010 by asblackwood

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