Regulatory / Oversight

Automatic Revocation of Exemption List

On June 8, 2011, the Internal Revenue Service (IRS) released a list of more than 275,000 nonprofits that had their tax-exempt status automatically revoked due to failure to file annual returns. View the IRS automatic revocation list, and read the National Council's special webpage on automatic revocation and download a tip sheet on what to do if your organization's tax-exempt status was revoked.

2009 Form 990 Informational Tax Return

The IRS has released revised 990 and 990-EZ forms, along with schedules and instructions, for filing tax information in 2010-11.

Type III Supporting Organizations

The Pension Protection Act of 2006 changed the law regulating supporting organizations and created a category for Type III supporting organizations. Type III entities are “operated in connection with” a publicly-supported organization and meet certain tests designed to ensure that it will be responsive to, and significantly involved with, the operations of the supported organization. Congress tasked the IRS with clarifying the differences and coming up with an appropriate payout requirement for organizations that are not closely related to the entities they support. The IRS released proposed regulations for Type III supporting organizations that outline criteria for determining whether they are “functionally integrated” with their supported organizations. Organizations not meeting those criteria would be subject to a five percent annual payout requirement. The IRS is evaluating public comments about the proposed rules and is expected to issue final regulations this year.

Donor Advised Fund Study

The Pension Protection Act of 2006 directed the Treasury Department and the IRS to study the law and practices applicable to donor advised funds to determine whether and to what extent additional restrictions should be imposed on these entities. Donor advised funds are defined as accounts created at public charities, including community foundations, to which donors have advisory privileges related to the distribution or investment of balances held in the account. The IRS has sought public comments on a number of questions designed to clarify whether these charitable giving vehicles should be treated in a manner similar to private foundations, including the imposition of minimum payout requirements. The Treasury/IRS study was due in 2007, but is expected to be released in March or April 2010.

The IRS has prepared useful guidance on donor advised funds.

Federal Regulations and Job Creation

Federal regulations are frequently criticized for frustrating job creation, and the President and House Republicans are taking steps to identify key problem areas. On January 18, President Obama signed an executive order on Improving Regulation and Regulatory Review calling for “a government wide review” of federal rules and regulations to remove those “that stifle job creation and make our economy less competitive.” The order was accompanied by an op-ed by the President published in the Wall Street Journal. In the House, Oversight and Government Reform Chairman Darrell Issa (R-CA) has created a website, www.AmericanJobCreators.com, on which he is asking employers to identify government regulations and practices that either help or inhibit job creation. The website asks for responses to the questions: “Where does Washington help, and where does it hurt?”

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