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Final regulations: Form 4720 filing requirement for excise taxes, abatement

U.S. Form 4720 filing requirement for excise taxes

The U.S. Treasury Department and IRS today released for publication in the Federal Register final regulations (T.D. 9855) concerning the return to be used to pay certain excise taxes imposed by sections 4960, 4966, 4967, and 4968 and the time for filing the return.


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The final regulations [PDF 416 KB] adopt “without change” regulations that were proposed in November 2018. The final regulations will be published in the Federal Register on April 9, 2019.


These regulations concern the excise taxes related to certain distributions from donor advised funds. These taxes are “qualified first tier taxes” for abatement purposes and, therefore, are subject to abatement under generally applicable rules. 

Also, as added to the Code by Pub. L. No. 115-97 (enacted December 22, 2017):

  • Section 4960 requires tax-exempt organizations to pay a 21% excise tax on remuneration over $1 million and on “excess parachute payments” paid to “covered employees.”
  • Section 4968 imposes a 1.4% excise tax on the net investment income of an “applicable educational institution.”

The November 2018 proposed regulations were issued to amend existing procedural regulations to provide that persons (including governmental entities) liable for section 4960, 4966, 4967, or 4968 excise taxes are required to file a return on Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code. Also, the proposed regulations established the time period for filing Form 4720, and updated existing regulations to clarify that section 4966 and section 4967 taxes are qualified first-tier taxes subject to abatement under section 4962. Read a description about the proposed regulations: TaxNewsFlash


For more information, contact a tax professional with KPMG’s Washington National Tax practice:

Ruth Madrigal | +1 202 533 8817 |

Preston Quesenberry | +1 202 533 3985 |

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