IRS Issues New Rules for Association Foundations

By: Eileen Morgan Johnson, CAE

New final federal regulations governing "supporting organizations" contain notice requirements, rules for scholarship programs, and other obligations. If your association has a foundation that supports its mission, here's what you need to know to ensure compliance with the new rules.

Associations with related foundations that are considered to be "supporting organizations" under Internal Revenue Code Section 509(a)(3) should pay attention to a recent decision by the Internal Revenue Service. The IRS published the final and proposed regulations for supporting organizations on December 28, 2012, in T.D. 9605, "Payout Requirements for Type III Supporting Organizations That Are Not Functionally Integrated." ...