Pension Protection Act of 2006 Revises EO Tax Rules


On August 17, 2006, the President signed the Pension Protection Act of 2006. The statute enacted numerous changes to the tax law provisions affecting tax-exempt organizations.

Key Provisions

Key provisions of the legislation include the following:

  • Beginning in 2008, exempt organizations with gross receipts of $25,000 or less must file an annual notice, using a filing system which is now available.
  • Controlling organizations must report income from and loans to controlled organizations as well as transfers between controlled and controlling organizations. This provision is effective for returns due (without regard to extensions) after the date of enactment.
  • Section 501(c)(3) organizations that file unrelated business income tax returns (Forms 990-T) must now make them available for public inspection. This provision is effective for returns filed after the date of enactment.
  • Applicable exempt organizations were subject to new reporting requirements when they acquire life insurance contracts that were structured to give both the exempt organization and private investors an interest in the contract. For purposes of this reporting requirement, applicable exempt organizations include governmental organizations (including Indian Tribal Governments) and employee stock ownership plans.
  • Charitable contributions: The statute enacted numerous provisions affecting charitable giving.

Additional information:

  • Webcast on EO provisions in Pension Protection Act: IRS specialists joined a panel of other exempt organizations experts to discuss these provisions in an IRS sponsored webcast on March 13, 2007.