Private Foundation Audit Response: The Current IRS Initiative, Form 4720, Disqualified Persons

Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Accounting
- event Date
Wednesday, October 7, 2020
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
110 minutes
-
BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.
-
BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).
This course will cover the latest IRS campaign targeting private foundations for 990-PF return preparers and advisers to foundations. Our panel of foundation experts will explain how to prepare form 990-PF to avoid selection and offer advice for handling the IRS examination of these charitable organizations.
Faculty

Mr. Lyons is a Tax Director, Exempt Organizations in the Nonprofit, Government & Healthcare Group at Marks Paneth LLP. He brings to this role the skills he has developed during more than 30 years of providing tax and consulting services to his clients in the nonprofit, higher education, and public sector industries. Mr. Lyons' experience includes handling substantial exempt organization tax issues. He has testified in front of the House and Ways Committee in Washington, DC establishing the current treatment of affinity royalty arrangements. Mr. Lyons has also been involved in special projects related to unrelated business income for exempt organizations, including but not limited to state filing issues, including settlements, foreign filing requirements for off-shore activities and use of exempt bond proceeds. He has advised clients on the use of for profit subsidiaries as well as disregarded entities.

Mr. Cook specializes in his firm’s tax-exempt practice and is part of his firm’s nonprofit industry team. His clients are primarily nonprofit organizations including charities, foundations, trade associations, social welfare organizations and hospitals and healthcare organizations. He presents at national trainings on nonprofit topics.

Mr. Petermann is a Partner of the Firm and serves as Co-Partner-in-Charge for the Private Foundation Practice. He has over 30 years of specialized experience in accounting for exempt organizations and private foundations, as well as closely-held businesses and financial services entities. He also holds a number of professional committee and community board positions.
Description
The IRS stated that it is taking a closer look at private foundations and has trained over 400 agents to focus on the use of private foundations by wealthy individuals. The IRS has pulled records on 1,000 private foundations for further examination. The IRS' Wealth Squad is seeking possible misuse of private foundations to lower the overall tax burden of the wealthy.
Restitution for unauthorized acts can be substantial, resulting in fines, undoing transactions, and ultimately the loss of the organization's tax exempt status. The loss of exempt status could result in an organization paying income tax on 50 percent on its earnings.
The Service can impose penalties and excise taxes for prohibited acts on substantial contributors, foundation managers, certain related persons, and the foundation. Similar to related parties but distinctly different are disqualified persons (DPs). Transactions between the foundation and DPs are always questionable and must be analyzed. Since once an individual is a DP, they remain a DP, this can be a substantial undertaking.
In addition to IRS scrutiny, an organization's Form 990-PF is available for public view via GuideStar or the organization. Understanding what and how to present the private foundation in the best light is critical for preparers of Forms 990-PF.
Listen as our panel of private foundation experts discusses the IRS' latest campaign targeting private foundations, including tips for handling a PF audit, what transactions the IRS is targeting, and how to prepare Form 990-PF to lessen the likelihood of selection
Outline
- The IRS' latest initiative
- Areas of potential exposure for private foundations
- Form 4720: Return of Certain Excise Taxes Under Chapters 41 and 42 of the IRC
- Disqualified persons
- Handling the audit
- Penalties and sanctions
- Best practices
Benefits
The panel will review these and other critical issues:
- What is the current status of IRS' current initiative targeting private foundations?
- What noncompliance areas is the IRS focusing on in its examinations?
- What steps can 990-PF preparers take to mitigate the chance of PF audits?
- What does and does not need to be disclosed on the 990-PF?
- How are DPs defined; when and how are transactions with DPs reported?
NASBA Details
Learning Objectives
After completing this course, you will be able to:
- Identify disqualified persons
- Determine when filing for Form 4520 is required
- Decide which transactions the IRS may be targeting in its examinations of private foundations
- Ascertain specific transactions that may subject private foundations to sanctions
- Field of Study: Taxes
- Level of Knowledge: Intermediate
- Advance Preparation: None
- Teaching Method: Seminar/Lecture
- Delivery Method: Group-Internet (via computer)
- Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
- Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of pass-through taxation, including taxation of partnerships, S corporations and sole proprietorships, qualified business income, net operating losses and loss limitations; familiarity with net operating loss carry-backs, carry-forwards and carried interests.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).
Unlimited access to premium CLE courses:
- Annual access
- Available live and on-demand
- Best for attorneys and legal professionals
Unlimited access to premium CPE courses.:
- Annual access
- Available live and on-demand
- Best for CPAs and tax professionals
Unlimited access to premium CLE, CPE, Professional Skills and Practice-Ready courses.:
- Annual access
- Available live and on-demand
- Best for legal, accounting, and tax professionals
Unlimited access to Professional Skills and Practice-Ready courses:
- Annual access
- Available on-demand
- Best for new attorneys
Related Courses

Special Fundraising Events: Reporting and Disclosure Requirements, Unrelated Business Income, Gaming Activities
Monday, June 16, 2025
1:00 p.m. ET./10:00 a.m. PT
Recommended Resources
Gain a Competitive Edge Through Efficient CPE Strategies
- Learning & Development
- Business & Professional Skills
- Career Advancement