Proposed regulations: Type I and Type III supporting organizations

Type I and Type III supporting organizations

The Treasury Department and IRS today released for publication in the Federal Register a notice of proposed rulemaking concerning the prohibition on certain contributions to Type I and Type III supporting organizations and the requirements for Type III supporting organizations under section 509(a)(3).

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The preamble to today’s proposed regulations [PDF 276 KB] explains that the focus is primarily on the relationship test for Type III supporting organizations and that these proposed rules reflect statutory changes made by the “Pension Protection Act of 2006.”

The proposed regulations provide additional rules on the requirements for Type III supporting organizations, including:

  • Requirements to meet the “responsiveness test” for all Type III supporting organizations
  • Additional rules on the qualification of an organization as a functionally integrated Type III supporting organization, including provisions for supporting organizations that support governmental entities
  • Additional rules regarding the required annual distributions by a non-functionally integrated Type III supporting organization

The proposed regulations also define the term “control” for purposes of section 509(f)(2)—the measure that prohibits a Type I or Type III supporting organization from accepting contributions from persons who control the governing body of its supporting organization(s).

Comments about these proposed regulations and requests for a public hearing are due by a date that is 90 days after February 19, 2016 (the date when the proposed regulations will appear in the Federal Register).


For more information, contact the Managing Director-in-Charge of KPMG's Washington National Tax Exempt Organizations Tax group

D. Greg Goller |  +1 (703) 286- 8391 |

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