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Abstract: 

Qualification as either a Type I, II, or III supporting organization permits an organization to enjoy tax efficiencies available to public charities (and not to private foundations). This article defines the essential requirements for Type I, II, and III qualification and explains the organizational, operational, relationship and disqualified persons tests used by the IRS to determine a foundation’s status. Earlier in 2016, the IRS and Treasury issued new proposed regulations that set for additional rules on the requirements for Type III classification, and those new regulations are examined here in detail. Once finalized, the 2016 proposed regulations will determine whether an organization can qualify as a public charity by virtue of being a supporting organization.

Keywords: Qualifying for Supporting Organization Status; IRC Sec. 509(f)(2)

Affiliations:  1: Strasburger & Price, LLP.