IRS to Take A Look at College and University UBI

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November 14, 2006

Along with implementing the many tax law changes enacted in the Pension Protection Act of 2006, in the coming year, the Exempt Organizations Division at IRS plans to investigating new areas of perceived abuses by tax exempts. Among several projects announced in the FY 2007 EO Implementing Guidelines, is one to review the treatment and allocation of income and expenses and current practices by colleges and universities for calculating UBI. The project is set to roll out sometime in 2008.

Other projects announced in the 07 workplan include:

enforcement efforts related to compliance with employment tax withholding and reporting;
a review of how community foundations operate;
following up referrals of more than 300 501(c)(3) organizations that may have violated the prohibition on political intervention during the 2006 election cycle;
publication of the report on the 2004 executive compensation enforcement efforts;
analysis and guidance flowing from the 2006 review of tax-exempt hospitals; and
examinations and staff training on donor advised funds and supporting organizations.

The EO Division will also continue its efforts on the comprehensive redesign of Form 990, with plans to release a draft form and instructions for public comment in 2007.

Summary of Provisions in H.R. 4, the Pension Protection Act of 2006
Summary of Donor Advised Funds and Support Organizations Provisions in H.R. 4