Additional Requirements for Supporting Organizations
Supporting organizations are subject to additional requirements under the Pension Protection Act of 2006. The IRS has issued guidance and new procedures implementing the legislation.
- The IRS and Treasury Department issued proposed regulations defining functionally integrated Type III supporting organizations and implementing a payout requirement for Type III organizations.
- Supporting organizations may be subject to intermediate sanctions excise taxes with respect to payments to and transactions with substantial contributors or certain related parties. See Notice 2006-109, below, for more information.
- Donors are provided guidance on how to determine whether a grantee is a public charity under section 509(a)(1), (2), or (3), in IRS Business Master File information.
- Responding to Congressional direction, the Treasury Department reported the results of a study of supporting organizations and donor-advised funds in December 2011.
- Supporting organizations that want to change their public charity classification should file Form 8940, Request for Miscellaneous Determination.
- Notice 2006-109 provides interim guidance on issues affecting supporting organizations and sponsoring organizations of donor advised funds.
- A letter to supporting organizations with gross receipts of $25,000 or less explains that they are now required to file Form 990 or Form 990-EZ.
- IRS guidance provides transitional relief and filing procedures for certain charitable trusts that fail the responsiveness test for Type III supporting organization status.
- The IRS explained how foundations should treat distributions to certain supporting organizations.