Requirements for donor-advised funds

Donor-advised funds are subject to requirements under the Pension Protection Act of 2006. The IRS has issued guidance and procedures implementing the legislation.

• Excise taxes PDF may apply to sponsoring organizations and managers of donor-advised funds.
  • Thus, transactions between sponsoring organizations and fund managers may be subject to intermediate sanctions excise taxes and donor-advised funds may be subject to taxes on excess business holdings.
• Donors are provided guidance on how to determine whether a grantee that is a donor-advised fund is a public charity under section 509(a)(1), (2), or (3), in IRS Business Master File information.
• Notice 2006-109 provides interim guidance on issues affecting supporting organizations and sponsoring organizations of donor advised funds.