Tax News

CCH (cch.taxgroup.com) reports:

  The IRS has issued procedures that allow a supporting organization under Code Sec. 509(a)(3) to request a change in its public charity classification to a public charity classification under Code Sec. 509(a)(1) and Code Sec. 170(b)(1)(A)(vi) or Code Sec. 509(a)(2) (i.e., churches, schools, hospitals and charities that receive public support). An organization may want to change its status as a result of changes made by the Pension Protection Act of 2006 (P.L. 109-280). Specifically, supporting organizations are not eligible to receive IRA distributions under the provision that allows for such distributions without an inclusion in gross income. Additionally, private foundations are restricted from making distributions to supporting organizations.

  The procedures for requesting a change in public charity classification are consistent with recently issued temporary and proposed regulations that implement the redesign of the Form 990, Return of Organization Exempt from Income Tax. A request for reclassification must made under the rules of Rev. Proc. 2009-4, I.R.B. 2009-1, 118. The request must include a number of specific items and it must be signed under the penalties for perjury by the organization's officer, director, trustee or other authorized official. There is no user fee for the determination letter.

  Formerly, requests for reclassification were made under
Announcement 2006-93, 2006-1 CB 1017 and were processed by the IRS on an expedited basis. Requests submitted under Announcement 2006-93 will be processed, although the announcement is now superseded.

Announcement 2009-62, 2009FED ¶46,442

Other References:

 
Code Sec. 509

  CCH Reference - 2009FED ¶22,812.50

  Tax Research Consultant

  CCH Reference - TRC RETIRE: 66,514
CCH Reference - TRC EXEMPT: 21,202
CCH Reference - TRC EXEMPT: 21,210