Exempt Organizations Advisory - New Reporting Requirements Required by Pension Protection Act

The Pension Protection Act of 2006 ("PPA") imposes new reporting requirements on supporting organizations and sponsoring organizations of donor-advised funds for tax years ending after August 17, 2006. Additionally, the PPA imposes new reporting requirements on exempt organizations that are controlling organizations within the meaning of Code section 512(b)(13), such as organizations with for-profit subsidiaries, for returns that are due after August 17, 2006 (excluding extensions).

Since 2005 forms (including Forms 990, 990-EZ, 990-PF, 990-T and 4720) and instructions will not be changed to reflect these reporting requirements, the IRS has released new guidance to help exempt organizations comply with new reporting requirements. Instructions on how to provide the required information on 2005 forms can be accessed by clicking here.

In other news, the 2006 Form 990 and instructions, which reflect PPA changes, are now available at www.irs.gov.

The PPA contains numerous changes to the tax law that affect tax-exempt organizations. We have previously reported on these changes. To read our Advisory on the IRS’ interim guidance for donor advised funds and supporting organizations, please click here; to read our Advisory describing provisions of the PPA that affect tax exempt organizations, please click here.