Rev. Proc. 71-41

Section 1. Purpose

The purpose of this Revenue Procedure is to state the conditions under which certain private foundations will be deemed to have reasonable cause for failure to comply with the requirements of sections 6033, 6056, 6104, and 6151 of the Internal Revenue Code of 1954 for filing of returns and payment of taxes.

Sec. 2. Background

In order for organizations described in section 501(c)(3) of the Code to determine their filing responsibilities under sections 6033, 6056, and 6104 of the Code, it is necessary they know whether they are private foundations under section 509(a) of the Code. In Revenue Ruling 71-236, C.B. 1971-1, 398, the Internal Revenue Service provided limited relief from the reporting requirements of sections 6033, 6056, and 6104 to organizations that, by the due date for filing Form 990, had either (1) filed a Form 4653, Notification Concerning Foundation Status, without admitting to being a private foundation, or (2) submitted a statement in connection with Form 1023, Application for Recognition of Exemption, claiming not to be a private foundation. Such relief was in the form of an extension of time to complete the private foundation requirements of those sections, and this extension of time expires six months from the due date for filing Form 990. Thus for calendar year organizations that have not yet been notified whether they are private foundations, the extension of time expires November 15, 1971, and if such organizations fail, without reasonable cause, to comply with the private foundation reporting requirements, they may be liable for penalties if they are private foundations. The penalties are provided by sections 6651, 6652, and 6685 of the Code.

Sec. 3. Instructions

Because of the absence of final regulations under sections 509(a) and 170(b)(1)(A) of the Code, some organizations that received an extension in Revenue Ruling 71-236 are still awaiting a determination of their status and are unable to determine what returns they are required to file. If these organizations are in fact private foundations, they will be deemed to have reasonable cause for failure to comply with the requirements of sections 6033, 6056, 6104 and 6151 for filing of returns and payment of taxes, and will be granted relief from the penalty provisions of sections 6651, 6652 and 6685 of the Code, if they comply with the requirements in the next paragraph within 90 days after the last of the following dates:

(1) The day on which regulations first prescribed under section 509(a) become final, or

(2) The day on which corrective and clarifying regulations under section 170(b)(1)(A) and designated as section 1.170(a)-9 (including the regulations pertaining to community trusts) become final.

At that time the organizations must file an amended Form 990, with Part III completed, and pay tax due as of the date Form 990 was due, with interest as provided by law; and file Form 990-AR, if required, and publish notice of availability thereof as required by section 6104(d) of the Code. They must attach a statement to the returns that cites this Revenue Procedure and shows that they qualified for the extension of time provided in Revenue Ruling 71-236. This statement, together with the late returns, must be submitted to the Philadelphia Service Center, 11601 Roosevelt Boulevard, Philadelphia, Pennsylvania 19155, within the prescribed time period.

Sec. 4. Effect

This Revenue Procedure applies to returns and taxes required for taxable years beginning in 1970.

¹ Also released as Technical Information Release 1117, dated November 12, 1971