|
IRS Official Comments on College and University Compliance Questionnaire and Draft Form 990
Speaking at a program of the National Association of College and University Business Officers in Chicago, Illinois, a senior IRS official on October 28 discussed the IRS's College and University Unrelated Business Income Tax Project. She also described additional changes the IRS is considering with respect to the draft Form 990 that was released for public comment last June.
In connection with its College and University Unrelated Business Income Tax Project, the IRS expects to send a questionnaire to a broad cross-section of small, medium, and large institutions in early 2008. The questionnaire will be similar to the Compliance Check Questionnaire sent to tax-exempt hospitals in May 2006, and will focus on:
- Executive compensation
- Relationships between organizations within a university system, including allocations of funding between related organizations
- Unrelated business activities, particularly business activities that consistently incur losses
It is anticipated that the questionnaire will be in electronic format.
Possible Changes to Form 990
The IRS official also discussed changes that the IRS is considering before
finalizing the revised Form 990. These are in addition to the proposed changes
previously discussed in public forums by the IRS. The IRS is considering the following additional changes:
- Dollar and percentage thresholds that trigger the requirement to answer certain questions or file certain schedules may be adjusted. For example, the compensation thresholds for listing employees, former officers, and former directors and trustees in Part II may be changed.
- De minimis fringe benefits would not need to be reported in Schedule J (Supplemental Compensation Information).
- The instructions would clarify what information is required by federal tax law, and which questions relate to "best practices" not required by law.
- Schedule D (Supplemental Financial Statements) would not require asset-by-asset reporting. Instead, organizations would report holdings by type of investment.
- The layout of the form would be changed to allow more space for answering certain questions, and a blank schedule—Schedule O—would be added to allow organizations to provide additional information as needed.
- The instructions would provide further guidance on who is deemed an officer or director for purposes of the core form and Schedule J.
- A transition rule would be implemented with respect to Schedule D, which requires a rolling five-year reporting period for endowment assets. Organizations would not have to look back to years prior to the implementation of the new form. Instead, the reporting look-back for endowment assets would be phased in on a year-by-year basis—only one year of information would be reported in the year of implementation; two years of information would be reported the year after the form is implemented; and so forth.
- In response to concerns that detailed reporting required by the draft Schedule F (Statement of Activities Outside the U.S.) could endanger aid workers in some countries, foreign activities would be reported by region, rather than by specific country.
|
|
