Tax News

CCH (cch.taxgroup.com) reports:

The IRS has provided transitional relief and filing procedures for certain charitable trusts that fail the responsiveness test for Type III supporting organizations. These procedures apply to charitable trusts that do not qualify as supporting organizations under the significant voice test, but that did qualify as supporting organizations under the charitable trust test. The elimination of the charitable trust test for tax years beginning after August 16, 2007, may cause these trusts to be classified as private foundations.
A trust that becomes a private foundation during 2007 because of the elimination of the charitable trust test may continue to file Form 990, Return of Organization Exempt from Income Tax, for tax years beginning before January 1, 2008. The trust is not required to file an information return on Form 990-PF, Return of a Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust ; or pay the Code Sec. 4940 excise tax on investment income, until its first tax year beginning after December 31, 2007. Normal due dates and submission rules apply to Form 990.
For its first tax year beginning after 2007, a trust that becomes a private foundation because of the elimination of the charitable trust test must file a paper Form 990-PF, and write "Notice 2008-6 status change" across the top. Otherwise, normal due dates and submission rules for Form 990-PF apply.
For tax years beginning after 2007, charitable trusts can continue to file Form 990 if they meet the significant voice test for Type III supporting organizations, or if they can establish that they meet the requirements for a Type I or Type II supporting organization. These trusts do not have to file Form 990-PF.
Notice 2008-6, 2008FED ¶46,219
Other References:
Code Sec. 509
CCH Reference - 2007FED ¶22,812.65
Tax Research Consultant
CCH Reference - TRC EXEMPT: 21,208.15