Proposed Guidance Under Treasury Regulation Section 1.509(A)-4

16 Pages Posted: 3 May 2010

Date Written: April 1, 2010

Abstract

Current Treasury Regulations provide that a supporting organization must maintain one of three types of relationships with its supported organization in order to maintain public charity status. A supporting organization that is operated in connection with one or more supported organizations is known as a Type III supporting organization. An organization qualifies as a Type III supporting organization if it fulfills a “responsiveness” test and an “integral” part test. For charitable trusts, an alternative “responsiveness” test current exists, but Proposed Regulation under the Pension Protection Act eliminates this alternative test. This paper recommends that Treasury modify the Proposed Regulation by adopting a rebuttable presumption for charitable trusts that wish to be classified as Type III supporting organizations.

Keywords: supporting organizations, support organizations, support org, Type III SO

Suggested Citation

Powell, Mark, Proposed Guidance Under Treasury Regulation Section 1.509(A)-4 (April 1, 2010). Available at SSRN: https://ssrn.com/abstract=1598002 or http://dx.doi.org/10.2139/ssrn.1598002

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