|Question 13Verbal

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While US public charities, like Kaiser Foundation Hospitals, must file Form 990 yearly with the IRS, private foundations, such as the Gordon and Betty Moore foundation, must file a different form, 990-PF. In addition, foundations that engage in certain prohibited activities must also file Form 4720 and pay a penalty tax on the money involved. Private foundations are prohibited from holding excess interests in a business enterprise, "self-dealing" (conducting activities that benefit foundation insiders), making taxable expenditures such as grants to non-charitable entities, and failing to cross a required threshold in making charitable distributions from income. Out of the organizations that fled Form 990-pf in the years 2003 2005, ______
Which choice most effectively uses data from the graph to complete the assertion?
a greater percentage of those that also filed Form 4720 did so because they held excess interests in a business enterprise than the percentage of those that filed Form 4720 because they did not meet the minimum charitable distribution requirement.
A
more of those that also filed Form 4720 failed to meet a minimum charitable distribution requirement than did those organizations that filed Form 990 but also filed Form 4720 for the same reason.
B
those that were also required to file Form 4720 because they had excess holdings in a business enterprise paid, on average, a significantly smaller penalty than those organizations that filed Form 4720 because they engaged in self-dealing.
C
those that were also required to file Form 4720 were more likely to do so because they did not meet the minimum charitable distribution requirement than for other reasons.
D