Private Foundations are usually created by wealthy benefactors or businesses. Unlike other types of 501(c)(3) organizations, private foundations do not generally solicit for donations from the general public.
To ensure an appropriate use of funds, private foundations also have more mandatory paperwork as well as minimum asset distribution requirements (5% each year). Private Foundations must file IRS Form 990-PF to report financial activities, total assets, officers and trustees, and grants awarded for the specified fiscal year.
Form 990-PF Disclosure Requirements
Private foundations are required by law to make available their three most recent tax returns to anyone who requests them in person or in writing. Hard copies may also be requested from the IRS, or from a state’s charity office.
Form 990-PF Filing Deadline
The filing deadline for most foundations is typically four and a half months after the end of the foundation’s fiscal year. Note that it could take months for the IRS to process and make them available in digital format.
Failure to File
If your foundation does not file its 990-PF on time or submits an incorrect filing with no reasonable cause, the IRS could impose penalties as much as $20 per day but not exceeding $10,500 for foundations with gross receipts of less than $1,000,000, and up to $105 per day but not exceeding $53,000 for organizations with gross receipts exceeding $1,067,000 for the tax year.
In instances where there is missing or incorrect information on your Form 990-PF, the IRS will mail a letter to your foundation seeking an explanation for the incorrect or missing information. Failure to rectify the issue within the given time frame will result in daily fines of $10, capped at $5,000.