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Not SO Bad – Proposed Regulations for Type III Supporting Organizations

Trusts & Estates

Originally Published in Trusts & Estates.


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While few Type III supporting organizations are likely to overjoyed by them, the anxiously awaited Proposed Regulations1 are not really so bad for the most part, and are significantly better than we might have expected, based on recent alarming pronouncements from the IRS.2

The first bit of good news is that the Proposed Regulations drop the earlier suggestion3 that the number of permissible supported organizations be limited to only five. This anticipated limit on the number of organizations which could be supported by any single “non-functionally integrated” (i.e., “grantmaking”) Type III supporting organization was said to have been designed to ensure a “tight nexus” between the supporting organization and its supported organizations. “Many” of the comments received by the Service suggested that a five-charity limit would be “arbitrary,”4 and the drafters of the Proposed Regulations ultimately agreed.

Another break, this one for “functionally integrated” (i.e., “activities”) Type III supporting organizations, is that the Proposed Regulations drop an earlier proposal5 that such organizations should be required to meet an “expenditure” test and an “assets” test, in addition to the existing “but for” test. These additional tests were to be patterned on the similarly-named tests applicable to private operating foundations under Code Sections 4942(j)(3)(A) and (B). Commentators complained that these tests were “unduly restrictive,” as well as “more burdensome than those proposed for non-functionally integrated Type III supporting organizations.”6

Even with these fortunate omissions, a number of aspects of the Proposed Regulations are daunting enough. Briefly to summarize, the Proposed Regulations provide that all Type III supporting organizations must satisfy the following requirements:

  • A “notification requirement” relating to information which Type IIIs would be required to provide to all of their supported organizations;7
  • A revised version of the “responsiveness test” designed to demonstrate that all Type IIIs are responsive to the needs of their supported charities;8 and
  • A revised version of the “integral part test” designed to demonstrate that all Type IIIs constitute an integral part of their supported organizations.9 The test is liided into an “integral part test” for functionally-integrated Type IIIs,10 and a considerably more complex “integral part test” for non-functionally integrated Type IIIs.11

Other provisions of the Proposed Regulations address the requirements under the Pension Protection Act of 2006 (“PPA”) that bar a Type III supporting organization from supporting an organization that is organized outside the US,12 and that prohibit Type IIIs from accepting gifts or contributions from those in direct or indirect control of a supported organization’s governing body.13

Notification Requirement

All Type III supporting organizations – functionally integrated or not – would be required under the Proposed Regulations to provide the following information each year to all of its supported organizations:

  • A written notice addressed to the supported organization’s principal officer, indicating the type and amount of support received from the supporting organization in the preceding year;
  • A copy of the supporting organization’s most recently filed annual return, Form 990; and
  • A copy of the supporting organization’s governing documents, including its bylaws, as well as any amendments to the governing documents. This element of the notification requirement need be satisfied only once, unless the governing documents are amended.14

Emailing this information to the supported charities is fine.15 The information would need to be postmarked or emailed by the last day of the 5th month after the close of the supporting organization’s tax year (May 15 for calendar-year Type IIIs).16 Supporting organizations are advised to retain proof of delivery in their records.17

None of these elements seem particularly burdensome, though some Type IIIs may well be uncomfortable with the first element, as those Type IIIs that do not usually (or ever) provide support to a particular named supported organization may not wish to underscore this lapse to the principal officer of the ignored charity. That may well be the whole idea behind the proposed requirement, and Type IIIs might be encouraged out of a sense of embarrassment if nothing else, to be more evenhanded with their largess. One comment received by the IRS in the drafting stage of the Proposed Regulations suggested that the notification information be required to be provided only to the “lead” supported organization, to help reduce administrative burdens,18 but this suggestion was not incorporated into the Proposed Regulations.

Responsiveness Test

PPA abandoned the “charitable trust” alternative of the “responsiveness test,” but left matters somewhat up in the air by not overtly replacing it with the other, “significant voice,” alternative.19 The Proposed Regulations fill the gap by adopting the “significant voice” alternative as the sole means by which a Type III supporting organization would be able to satisfy the “responsiveness test.” A Type III would meet the test if any one of the three threshold conditions are met:

  • One or more officers, directors, or trustees of the Type III are elected or appointed by the officers, directors, trustees, or membership of the supported organization; or
  • One or more members of the supported organization’s governing bodies are also officers, directors, or trustees of, or hold “other important offices” in, the Type III organization; or
  • The Type III’s officers, directors, or trustees maintain a “close and continuous working relationship” with the supported organization’s officers, directors or trustees;

and, as a result, the supported organization’s officers, directors or trustees have a “significant voice” in the Type III’s investment policies, the timing and manner of making grants, and the choice of recipients, and in otherwise directing the use of the Type III’s income or assets.20 This formulation of the “responsiveness test” would apply to all Type III supporting organizations, including charitable trusts. There had been some speculation that charitable trusts would be afforded their own special means of satisfying the test, to replace the rejected “charitable trust” method of compliance, and some commentators told the IRS that the “significant voice” test could be difficult to satisfy due to state-law fiduciary requirements relating to trusts,21 but these suggestions ultimately failed to persuade the drafters. Nonetheless, the explanatory discussion of the Proposed Regulations invites comments regarding a specific “responsiveness” rule for charitable trusts.22

An important question left unanswered by the Proposed Regulations is whether, if a Type III supports more than one supported organization (as is usually the case), it is sufficient if only one of the supported charities has the “significant voice,” or whether all, or perhaps a majority, of the supported charities must have a “significant voice.” Presumably, the Proposed Regulations contemplate that the supported organization which receives the bulk of the Type III’s support (the “attentive” charity, to borrow a term from the “integral part test”) is the one which would be required to have the “significant voice,” but this is not clear.

Two Examples are offered to illustrate the revised “responsiveness test.” In Example (1), a bank-trusteed testamentary trust supports a private university. The trustee has discretion as to the timing and amount of distributions. The trustee and an officer of the university have quarterly face-to-face meetings in which they discuss the university’s projected needs. In addition, the trustee communicates regularly with the university’s officer and provides him with quarterly investment statements and an annual accounting statement, as well as satisfying the “notification requirement” under the Proposed Regulations. The trust satisfies the “responsiveness test.”23

In contrast, the trustee in Example (2) sends an annual cash payment to the supported organizations, as well as an accounting statement, and also satisfies the “notification requirement” elements, but has no other communication with them. This trust flunks the “responsiveness test.”24 These Examples suggest that a good many Type IIIs will need to revisit their policies as to the frequency and nature of their interactions with the supported organizations.

Integral Part Test

A Type III supporting organization will constitute an “integral part” of a supported organization if it is “significantly involved” in the operations of the supported organization, and if that organization is in turn dependent upon the supporting organization for the type of support provided.25 The Proposed Regulations provide for two different versions of the “integral part test,” depending on whether the Type III is or is not “functionally integrated” as to the supported organization. A “functionally integrated” Type III would satisfy the “integral part test” if it engages in activities:

  • Substantially all of which directly further the exempt purposes of the supported charity; and
  • That, but for the Type III’s involvement, would normally be engaged in by the supported charity.26

Activities which “directly further” the supported charity’s exempt purposes include holding title to, and managing, exempt-use property. In general, fundraising, investing or managing non-exempt use assets, and making grants, are activities which do not “directly further” the supported charity’s exempt purposes,27 unless the assets of the Type III’s sole supported charity are subject to the appropriation process of a Federal, State, local or Indian Tribal government for purposes or programs which are unrelated to the supported charity’s exempt purposes.28

In the alternative, a Type III which is the parent of all of its supported organizations would also thereby satisfy the “integral part test.”29 In order to be recognized as a “parent,” the Type III would need to exercise a substantial degree of direction over the supported charities’ policies, programs, and activities, and a majority of the supported charity’s officers, directors, or trustees would need to be appointed, directly or indirectly, by the Type III’s governing body or officers.30

Perhaps reflecting the drafters’ consciousness that the “integral part test” provisions for functionally integrated Type III supporting organizations are unusually intricate, no less than seven Examples are provided in the Proposed Regulations.31 On the theory that Examples involving organizations which fail the particular test being illustrated are generally the more interesting and more instructive ones, Example (4) bears closer examination. That Example involves an organization created by an inliidual to provide scholarships for students attending a private secondary school. The school establishes the scholarship criteria, publicizes the program, solicits and examines applications, and chooses the scholarship awardees, while the organization merely invests its assets and disburses the actual scholarship funds to the awardees. Based on these facts, the organization does not qualify as a functionally integrated Type III supporting organization.32

An entirely different form of “integral part test” would apply to “non-functionally integrated” (i.e., “grantmaking”) Type III supporting organizations. A non-functionally integrated Type III would be required to satisfy both: (1) a “distribution requirement”; and (2) an “attentiveness requirement.”33 The provisions elucidating these elements occupy by far the largest portion of the Proposed Regulations, and they are not uncomplicated.

Simply stated, a non-functionally integrated Type III would meet the “distribution requirement” if it distributes each year at least 5% of the value of its investment assets, with adjustments. Adding some of the complexities to this basic overview, the organization would be required to distribute, to or for the use of one or more of its supported charities, amounts at least equaling its “annual distributable amount” for that year, and to do so on or before the last day of such year.34 The organization’s “annual distributable amount” for a year is painstakingly defined as 5% of the excess of the aggregate fair market value of all of its non-exempt-use assets, over the acquisition indebtedness as to such assets (determined under Code Section 514(c)(1) without regard to the taxable year in which the indebtedness was incurred), increased by any repayments of amounts taken into account to meet its distribution requirement for any taxable year, increased by amounts received from the sale or other disposition of property (to the extent the organization took the acquisition of that property into account in meeting its distribution requirement for any taxable year), and, finally, reduced by the amount of taxes, if any, imposed on the organization under Subtitle A of the Code.35 For the first year of the Type III’s existence, its annual distribution amount, mercifully, is zero.36 If a Type III is unable to meet the distribution requirement, then provision is made for a “reasonable cause” exception, under which the organization can attempt to satisfy the Service that the failure was due solely to incorrect valuation, ministerial error, or events beyond the organization’s control, that the failure had a reasonable cause and was not the result of willful neglect, and that the distribution requirement is met within 180 days of discovery of the error (or 180 days after the organization is first able to meet the payout requirement).37

The amount of a distribution to a supported organization is the fair market value of the property as of the date of distribution.38 Distributions that “count” toward the distribution requirement include: (1) amounts paid to a supported organization to accomplish its exempt purposes; (2) amounts paid to acquire an exempt-use asset for the supported organization; and (3) amounts expended by the Type III organization for “reasonable and necessary administrative expenses.”39 A 5-year “carryover” provision permits the Type III organization to use its “excess” distributions to reduce its distributable amount in any of the five taxable years immediately subsequent to the year in which the excess was created.40

Quite a lengthy run of highly detailed provisions of the Proposed Regulations are devoted to the valuation of assets for purposes of the distribution requirement element of the “integral part test” applicable to non-functionally integrated Type III supporting organizations.41 Highlights (if that is not too satiric a term in this context) include the following. Valuation is to be made in the year before the year of distribution.42 The aggregate fair market value of the Type III’s non-exempt-use assets is the sum of: (1) the average of the fair market values on a monthly basis of securities for which market quotations are readily available; plus (2) the average of cash balances on a monthly basis; plus (3) the fair market value of all other assets for the period during the taxable year such assets are held by the Type III supporting organization.43

Certain assets are excluded in the valuation process: (1) any future interest, such as a vested or contingent remainder legal or equitable interest, until constructively received by the organization; (2) assets in an estate, until distributed to the organization; (3) a present interest in a trust created or funded by another; (4) a pledge, regardless of whether it is legally enforceable; and (5) assets used or held for use to carry out a supported organization’s exempt purposes.44 Whether or not an asset is used or held for use to carry out the exempt purposes of the supported organization is a question of fact.45 An office building used to provide offices for employees managing endowment funds is not being used for exempt purposes. In situations in which property is under “split use,” allocation is permitted.46 Qualifying assets include administrative assets, real estate (or a portion thereof) used by the Type III directly in carrying out the supported organization’s exempt purposes, “physical facilities” such as works of art owned by the Type III organization and on public display in carrying out the exempt purposes of a supported charity, reasonable cash balances necessary to cover current administrative expenses and the like directly connected to the carrying out of the supported charity’s exempt purposes, and property leased out by the Type III organization in carrying out the supported charity’s exempt purposes (such as renovated apartments leased to low-income tenants).47 Detailed guidance is provided as to the valuation of specific assets, including securities,48 cash balances,49 common trust funds,50 and other assets falling outside these categories.51

In addition to the “distribution requirement,” the Proposed Regulations provide for a related “attentiveness requirement” which non-functionally integrated (“grantmaking”) Type III supporting organizations would be required to satisfy. Generally, this “attentiveness requirement” is satisfied if the non-functionally integrated Type III supporting organization distributes 1/3 or more of its annual “distributable amount” to the one or more supported charities that are attentive to its operations, and to which the Type III is responsive.52 For these purposes, a supported charity is “attentive” to the Type III’s operations if it receives annually from the Type III an amount of support that represents a “sufficient part” of the supported charity’s total support (or, in the case of support of a particular department or school of a university, a hospital, or a church, of that department or school’s total support).53 “Attentiveness” is established if:

  • the Type III supporting organization annually distributes an amount to the supported charity which is 10% or more of the supported charity’s total support; or
  • the Type III’s support is necessary to avoid the interruption of a particular substantial function or activity, even if it is not the supported charity’s primary program or activity; or
  • the amount of support is “sufficient,” based on a consideration of all pertinent factors, including the number of supported charities, the length and nature of the relationship with the Type III organization, and the purpose for which the funds are applied.54

Evidence of actual attentiveness is “of almost equal importance” to these “sufficient” factors.55 Distributions to donor advised funds (DAFs) do not establish “attentiveness.”56

Transition Rules; Effective Date

A functionally integrated Type III supporting organization that satisfies the current Treasury Regulations relating to the “integral part test”57 will be treated as meeting the requirements of the Proposed Regulations’ formulation of the “integral part test” until the first day of its first taxable year which begins after the date the Proposed Regulations become final or temporary. A non-functionally integrated Type III supporting organization that satisfies the current “integral part test”58 will be treated as meeting the requirements of the Proposed Regulations’ formulation of the “integral part test” until the first day of its second taxable year which begins after the date the Proposed Regulations become final or temporary.59 The “extra” year afforded to non-functionally integrated Type IIIs is designed to permit them to use the first year to value their assets under the new valuation regime.60 Accordingly, for the first taxable year after the Proposed Regulations become final or temporary, the annual “distributable amount” for non-functionally integrated Type III supporting organizations is zero.61

A separate transition rule applies to the excise tax provisions on “excess business holdings” under Code Section 4943, which were made applicable to Type III supporting organizations under the PPA.62 With regard to the unfortunate former Type III supporting organizations which were demoted to private foundation status because of their failure to satisfy the PPA requirements as of August 17, 2007, the present holdings of such private foundations are to be determined under the same rules applicable to Type III supporting organizations pursuant to Code Section 4943(f)(7).63

The Proposed Regulations become effective on the date of publication of the Treasury decision adopting them as final or temporary regulations.64 Type III supporting organizations that fail to meet the requirements of the Proposed Regulations once they are adopted as final or temporary regulations, will be demoted to private foundation status, and will be subject to the termination tax provisions of Code Section 507.65

Reliance on Prior Guidance

Private foundations are permitted to continue to rely upon the “grantor reliance standards” with regard to distributions to functionally integrated Type III supporting organizations, as provided in Section 3.0 of Notice 2006-109,66 until the Proposed Regulations are adopted as final or temporary regulations.67 As of September 24, 2009, the date of publication of the Proposed Regulations, the IRS will issue determination letters regarding a Type III’s qualification as functionally integrated, only to Type III supporting organizations that meet the “integral part test” requirements of Section 1.509(a)-4(i)(4) of the Proposed Regulations.68 Organizations which have already received favorable “functionally integrated” letters of determination may continue to rely upon the letter until final or temporary regulations are adopted, provided that the organization continues to meet the requirements of Section 1.509(a)-4(i)(4) of the Proposed Regulations or under an earlier IRS announcement.69
* * *
Challenging as they are for Type III supporting organizations, the Proposed Regulations could easily have been considerably worse, had they not dropped the five-charity limit and the “asset” and “expenditure” tests which had been announced earlier. Of the new burdens imposed by the Proposed Regulations, the “notification requirement” and the updated iteration of the “responsiveness test” should not present any insurmountable obstacles for most Type IIIs. Nor is the proposed version of the “integral part test” for functionally integrated Type III supporting organizations likely to be perceived as particularly troublesome. The more bitter pill is the proposed “integral part test” facing non-functionally integrated Type III supporting organizations. Apart from the complexities of the valuation provisions, the requirement that these Type IIIs distribute at least 5% of the value of their non-exempt-use assets annually may well be a substantial burden for many of them, particularly in an investment climate in which a 5% rate of return remains largely out of reach. Whether this proposed payout requirement and the nuances of the “attentiveness requirement” will drive even more Type IIIs to bail and convert to Type I or II status, or simply terminate altogether, remains to be seen. In an increasingly impossible era for fundraising and simply making ends meet, public charities that depend heavily on the support of Type III supporting organizations, and inliiduals and families that depend on these public charities in turn, may well become the ultimate losers if the Proposed Regulations are adopted in their current form.

Footnotes

  • 1 Prop. Reg. Sections 1.509(a)-4(a)(5)-(6), (f)(5), (i), Prop. Reg. Sections 53.4943-11(f), (g), 74 FR 48672 (September 24, 2009).
  • 2 See, e.g., IRS Announcement 2007-87, 2007-9 I.R.B. 611.
  • 3 Id.
  • 4 Explanation of Provisions, 74 FR at p. 48677.
  • 5 IRS Announcement 2007-87, 2007-9 I.R.B. 611.
  • 6 Explanation of Provisions, 74 FR at p. 48676.
  • 7 Prop. Reg. Section 1.509(a)-4(i)(2).
  • 8 Prop. Reg. Section 1.509(a)-4(i)(3).
  • 9 Prop. Reg. Section 1.509(a)-4(i).
  • 10 Prop. Reg. Section 1.509(a)-4(i)(4).
  • 11 Prop. Reg. Section 1.509(a)-4(i)(5).
  • 12 Prop. Reg. Section 1.509(a)-4(i)(10). See IRC Section 509(f)(1)(B)(i).
  • 13 Prop. Reg. Section 1.509(a)-4(f)(5). See IRC Section 509(f)(2)(B)(i).
  • 14 Prop. Reg. Section 1.509(a)-4(i)(2)(i)-(iii). The notification requirement implements IRC Section 509(f)(1)(A), added by the PPA.
  • 15 Prop. Reg. Section 1.509(a)-4(i)(2)(iv).
  • 16 Prop. Reg. Section 1.509(a)-4(i)(2)(v).
  • 17 Explanation of Provisions, 74 FR at p. 48675.
  • 18 Explanation of Provisions, 74 FR at p. 48675.
  • 19 Treas. Reg. Section 1.509(a)-4(i(2)(ii).
  • 20 Prop. Reg. Section 1.509(a)-4(i)(3)(ii), (iii).
  • 21 Explanation of Provisions, 74 FR at p. 48675.
  • 22 Id. Comments on the Proposed Regulations are due by 12/23/09.
  • 23 Prop. Reg. Section 1.509(a)-4(i)(3)(iv).
  • 24 Id. Prop. Reg. Section 1.509(a)-4(i)(3)(v) provides a transitional rule for pre-11/20/70 organizations, for which additional facts and circumstances, including the existence of a historic and continuing relationship between the supporting and supported organizations, may be taken into account.
  • 25 Prop. Reg. Section 1.509(a)-4(i)(1)(iii).
  • 26 Prop. Reg. Section 1.509(a)-4(i)(4)(i)(A).
  • 27 Prop. Reg. Section 1.509(a)-4(i)(4)(ii).
  • 28 Prop. Reg. Section 1.509(a)-4(i)(4)(iii), which provides further details as to this interesting but probably quite rare situation. See also Prop. Reg. Section 1.509(a)-4(i)(4)(iv), Examples (6) and (7).
  • 29 Prop. Reg. Section 1.509(a)-4(i)(4)(i)(B).
  • 30 Id. See Prop. Reg. Section 1.509(a)-4(i)(4)(iv), Example (1).
  • 31 Prop. Reg. Section 1.509(a)-4(i)(4)(iv).
  • 32 The other Examples relate to the following aspects of the “integral part test”: Example (1), the “parent” alternative; Examples (2), (3), and (5), the “but for” element; and Examples (6) and (7), the “government appropriation” exception.
  • 33 Prop. Reg. Section 1.509(a)-4(i)(5)(1)(A). A special exception applies to pre-11/20/70 trusts, which will meet the test if, for taxable years beginning after 10/16/72, the trustee provides written annual reports to all of the supported organizations, including a detailed list of the assets and the income they produce. Prop. Reg. Section 1.509(a)-4(i)(9). The drafters may have had a particular organization in mind.
  • 34 Prop. Reg. Section 1.509(a)-4(i)(5)(ii)(A).
  • 35 Prop. Reg. Section 1.509(a)-4(i)(5)(ii)(B)(1)-(4).
  • 36 Prop. Reg. Section 1.509(a)-4(i)(5)(ii)(C). Treasury may provide for an emergency temporary reduction in the annual distributable amount if a disaster or emergency strikes. Prop. Reg. Section 1.509(a)-4(i)(5)(D).
  • 37 Prop. Reg. Section 1.509(a)-4(5)(ii)(E)(1)-(3).
  • 38 Prop. Reg. Section 1.509(a)-4(i)(6).
  • 39 Prop. Reg. Section 1.509(a)-4(i)(6)(i)-(iii).
  • 40 Prop. Reg. Section 1.509(a)-4(i)(7)(i).
  • 41 Prop. Reg. Section 1.509(a)-4(i)(8). These provisions were drawn generally from the Treasury Regulations issued under Code Section 4942. See Explanation of Provisions, 74 FR at p. 48677.
  • 42 Prop. Reg. Section 1.509(a)-4(i)(8)(i)(A).
  • 43 Prop. Reg. Section 1.509(a)-4(i)(8)(i)(A)(1)-(3).
  • 44 Prop. Reg. Section 1.509(a)-4(i)(8)(i)(B)(1)-(5).
  • 45 Prop. Reg. Section 1.509(a)-4(i)(8)(i)(C)(1).
  • 46 Id.
  • 47 Prop. Reg. Section 1.509(a)-4(i)(8)(i)(C)(2)(i)-(iv). “Reasonable necessary cash balances” for this purpose will in general be deemed to be equal to 1.5% of the fair market value of all of the Type III supporting organization’s assets, other than assets used to carry out the supported charity’s exempt purposes.
  • 48 Prop. Reg. Section 1.509(a)-4(i)(8)(C)(iii)(A).
  • 49 Prop. Reg. Section 1.509(a)-4(i)(8)(C)(iii)(B).
  • 50 Prop. Reg. Section 1.509(a)-4(i)(8)(C)(iii)(C).
  • 51 Prop. Reg. Section 1.509(a)-4(i)(8)(C)(iii)(D). See Examples (1) and (2) of Section 1.509(a)-4(i)(5)(C)(iv) of the Proposed Regulations for illustrations of the operation of the “distribution requirement.”

  • 52 Prop. Reg. Section 1.509(a)-4(i)(5)(iii)(A).
  • 53 Prop. Reg. Section 1.509(a)-4(i)(5)(iii)(B).
  • 54 Prop. Reg. Section 1.509(a)-4(i)(5)(iii)(B)(1)-(3).
  • 55 Prop. Reg. Section 1.509(a)-4(i)(5)(iii)(B)(3). One may well wonder why actual attentiveness does not carry the day.
  • 56 Prop. Reg. Section 1.509(a)-4(5)(iii)(C). Examples (3) and (4) of Section 1.509(a)-4(i)(5)(iv) of the Proposed Regulations demonstrate the application of the “attentiveness requirement.”

  • 57 Treas. Reg. Section 1.509(a)-4(i)(3)(ii).
  • 58 Treas. Reg. Section 1.509(a)-4(i)(3)(iii).
  • 59 Prop. Reg. Section 1.509(a)-4(i)(11)(i)-(ii).
  • 60 Explanation of Provisions, 74 FR at p. 48678.
  • 61 Prop. Reg. Section 1.509(a)-4(i)(11)(iii).
  • 62 IRC Section 4943(f).
  • 63 Prop. Reg. Section 53.4943-11(f). Another provision applies a special transitional rule for pre-11/20/70 supporting organizations created as trusts, under which trusts qualifying as Type III supporting organizations under the transitional rules at Section 1.509(a)(i)(9) of the Proposed Regulations will be treated as “functionally integrated” Type III supporting organizations for purposes of Code Section 4943(f)(3)(A). Prop. Reg. Section 53.4943-11(g).
  • 64 Prop. Reg. Section 1.509(a)-4(i)(12).
  • 65 Explanation of Provisions, 74 FR at p. 48678. Comments are requested as to whether exceptions or special rules under Code Section 507 are needed for PPA-demoted Type III supporting organizations. Id.
  • 66 IRB 2006-51 (December 18, 2006).
  • 67 Explanation of Provisions, 74 FR at p. 48679.
  • 68 Explanation of Provisions, 74 FR at p. 48679.
  • 69 Explanation of Provisions, 74 FR at p. 48679.

IRS Circular 230 Disclosure: To the extent this message contains tax advice, the U.S. Treasury Department requires me to inform you that any such advice, whether in the body of the message or in any attachment, is not intended or written by my firm to be used, and cannot be used by any taxpayer, for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code. Advice from my firm relating to tax matters may not be used in promoting, marketing or recommending any entity, investment plan or arrangement to any taxpayer.

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