Internal Revenue Bulletin:  2009-47 

November 23, 2009 

EXEMPT ORGANIZATIONS


Table of Contents

REG-155929-06 REG-155929-06

Proposed regulations under section 509 of the Code, required by the Pension Protection Act of 2006, provide rules for supporting organizations that are operated “in connection with” their supported organization(s) (called “Type III supporting organizations”). The proposed regulations specify the information that Type III supporting organizations are required to provide their supported organizations. The proposed regulations also provide the criteria that Type III supporting organizations must satisfy in order to qualify as “functionally integrated.” For those Type III supporting organizations that do not qualify as functionally integrated, the regulations require an annual payout equal to five percent of the fair market value of the organization’s non-exempt use assets, a payout requirement modeled on that imposed on private foundations under section 4942.


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