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IRS Issues Transitional Relief for Certain Charitable Trusts

The IRS has issued guidance providing transitional relief and filing procedures for certain charitable trusts that fail the responsiveness test for Type III supporting organization status. The new procedures are intended for certain organizations that met the requirements to be classified as supporting organizations under Internal Revenue Code section 509(a)(3) until August 17, 2007 (the effective date of new requirements enacted by the Pension Protection Act of 2006):

  • Charitable trusts recognized as tax-exempt under section 501(c)(3); and
  • Non-exempt charitable trusts that are treated as section 501(c)(3) organizations for certain purposes.

The procedures will allow affected trusts to continue to file Form 990, and relieve them from paying excise tax on net investment income, for tax year 2007. 

Trusts that become private foundations by virtue of Pension Protection Act of 2006 must file Form 990-PF for tax years beginning on or after January 1, 2008.  New procedures require such trusts to highlight the change by filing a paper Form 990-PF for 2008. 


Page Last Reviewed or Updated: 11-Dec-2014