Donor-advised funds are subject to new requirements under the Pension Protection Act of 2006. The IRS has issued guidance and new procedures implementing the legislation.
- New excise taxes PDF may apply to sponsoring organizations and managers of donor-advised funds.
- Thus, transactions between sponsoring organizations and fund managers may be subject to intermediate sanctions excise taxes and donor-advised funds may be subject to taxes on excess business holdings.
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Donors are provided guidance on how to determine whether a grantee that is a donor-advised fund is a public charity under section 509(a)(1), (2), or (3), in IRS Business Master File information.
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Notice 2006-109 provides interim guidance on issues affecting supporting organizations and sponsoring organizations of donor advised funds.