Question

while us public charities, like commonfund, must file form 990 yearly with the irs, private foundations, such as the david and lucile packard 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 outlays for lobbying, and failing to cross a required threshold in making charitable distributions from income. out of the organizations that filed form 990 - pf in the years 2003 - 2005, ____. which choice most effectively uses data from the graph to complete the assertion? a. a smaller percentage of those that also filed form 4720 did so because they engaged in self - dealing than the percentage of those that filed form 4720 because they did not meet the minimum charitable distribution requirement. b. those that also filed form 4720 paid a larger penalty for failing to meet a minimum charitable distribution requirement than those organizations that filed form 990 but also filed form 4720 for the same reason. c. those that were also required to file form 4720 because they had excess holdings in a business enterprise paid, on average, a larger penalty than those organizations that filed form 4720 because they made taxable expenditures. d. those that also filed form 4720 collectively paid larger penalties for failing to meet the minimum charitable distribution requirement than for other reasons.

Explanation:

By observing the bar - chart, we can see that the percentage of private foundations filing Form 4720 due to not meeting the minimum charitable distribution requirement is higher than that due to self - dealing. Option A correctly uses data from the graph to complete the assertion. Option B compares penalty amounts which is not shown in the graph. Option C compares average penalties which is not indicated in the graph. Option D's claim about collective penalties for different reasons is not supported by the graph.

Answer:

A. a smaller percentage of those that also filed Form 4720 did so because they engaged in self - dealing than the percentage of those that filed Form 4720 because they did not meet the minimum charitable distribution requirement.