Tax Services:

Private Foundations

Status as a private foundation results from the nature of an organization’s support or lack of public supervision. Organizations classified as private foundations are subject to operating restrictions and requirements in addition to those applied to tax exempt charities in general. Private foundations are subject to onerous excise taxes for failing to comply with these restrictions and requirements, besides being subject to an excise tax on net investment income. Sisterson is a firm with years of experience in helping private foundations to avoid acting or failing to act in such a manner as to become liable for these excise taxes.

Our tax department has the knowledge and experience to assist private foundations in the following areas:

• Preparation of Form 990 PF
• Determination of unrelated trade or business income and the necessity of filing Form 990T and state tax returns
• Planning of charitable distributions in order to meet the qualification for the reduced tax on net investment income (1% vs. 2%)
• Preparation of accurate estimated tax payments to avoid underpayment penalties
• Assistance with the classification of operating and administrative expenses relating to net investment income and disbursements for charitable purposes
• Planning to avoid the excise taxes on:
  • self dealing
  • failure to distribute income
  • excess business holdings
  • investments which jeopardize charitable purpose
  • taxable expenditures