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ARTICLE · 14 JANUARY 2013

IRS Issues Final And Temporary Regulations On Supporting Organizations

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Many practitioners have been anxious to leaf through regulations to confidently determine whether an organization is a "functionally integrated" or "non-functionally integrated" Type III supporting organization, and the implications of either classification.

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Many practitioners have been anxious to leaf through regulations to confidently determine whether an organization is a "functionally integrated" or "non-functionally integrated" Type III supporting organization, and the implications of either classification.

On December 28, 2012, the Internal Revenue Service released the long-awaited final regulations for Type III supporting organizations, as well as temporary regulations addressing annual distribution requirements.  The text of the temporary regulations also serves as the text of the proposed regulations.  The final regulations describe all of the other requirements (outside of the annual distribution requirement explained below) of a Type III supporting organization's relationship with its supported organization.

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