Resolving IRS e-file Error F990PF-902-01: Here’s How to Fix It

Error Code: F990PF-902-01

Error Message:
If Form 990-PF, ‘ExemptOperatingFoundationsInd’ checkbox is checked, then the organization must have a foundation code “02” in the e-file database.

Understanding the Error:
You’ve encountered error F990PF-902-01 while e-filing your tax return. This error indicates your organization does not qualify as an exempt operating foundation under Section 4940(d)(2) for the taxable year and is exempt from the excise tax on net investment income imposed by Section 4940(a).

To get an exemption from paying excise tax the organization must be listed under foundation code “02”(Private operating foundation exempt from paying excise taxes or investment income) in the IRS e-file database.

How to Qualify Under section 4940(d)(2)?

1. Such a foundation is an operating foundation as defined in Section 4942(j)(3)
2. Such a foundation has been publicly supported for at least 10 taxable years.
3. At all times during the taxable year, the governing body of such foundation consists of individuals at least 75% of whom are not disqualified individuals, as defined in Section 4940(d)(3)(B), and is broadly representative of the general public.
4. At no time during the year does such a foundation have an officer who is a disqualified person

Steps to Resolve:

• Step 1: Uncheck the “Exempt Operating Foundations” checkbox on Part V Line 1a.
• Step 2: Fill information on part V (Excise Tax).
• Step 3: Provide Payment information (EFW or EFTPS) if you owe tax.
• Step 4: Retransmit the return.

Note – Please note that the retransmission is FREE with TaxZerone.

For any further assistance, we recommend contacting the IRS e-Help Desk Toll-Free Number 1-866-255-0654.