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Tag Archives: UBIT
July 25, 2012, 6:06 pm
IRS Struggles to Know if Big Nonprofits Pay the Taxes They Owe
Washington
Four years after the Internal Revenue Service started requiring nonprofits to submit more information about their charitable and commercial activities, the agency still struggles to determine which income earned by colleges, hospitals, and other big institutions is taxable, an IRS official said today.
Steven T. Miller, deputy IRS commissioner, made the comment at a Congressional hearing devoted to an issue that has vexed lawmakers and regulators—how to ensure that charities pay taxes on income they generate through businesslike activities such as magazine publishing and retail sales.
Figuring out if an organization’s business income is “substantially related” to its charitable mission, and therefore tax-exempt, “is a remarkably difficult and soft sort of issue to deal with,” Mr. Miller told the oversight subcommittee of the House Ways and Means…
July 19, 2012, 10:37 am
Congressional Hearing to Examine Complex Charity Operations
A Congressional panel will hold the second in a series of hearings on tax-exempt organizations next week, this one focusing on charities that have complicated operations such as profit-generating arms.
“Over the last two decades, the organizational structures of public charities have become increasingly complex, creating compliance and transparency issues,” said Rep. Charles Boustany Jr., a Louisiana Republican who heads the oversight subcommittee of the House Ways and Means committee.
He said his subcommittee wants to learn more, for example, about the rules governing the unrelated-business income tax, or UBIT, which applies to money charities raise through commercial activities not directly related to their missions.
It also will explore whether the revised Form 990 tax document that charities must file, introduced in 2008, has made it easier for the Internal Revenue Service…
May 9, 2012, 9:55 pm
Congressional Hearing to Examine Nonprofit Tax Issues
A Congressional hearing has been scheduled next week to examine various tax issues affecting nonprofits, including Internal Revenue Service oversight of universities and nonprofit hospitals.
Rep. Charles Boustany Jr., a Louisiana Republican, called the hearing. He told The Chronicle this winter he was concerned the tax agency had not been aggressive enough in monitoring charity abuses.
The event, which will take place May 16 at 10 a.m., will be the first in a series of hearings on tax-exempt organizations planned by the oversight subcommittee of the powerful House Ways and Means Committee.
Mr. Boustany, the subcommittee chairman, said in a statement that the hearing would allow nonprofits to weigh in on certain questions he had raised in a letter he sent to the IRS last October.
They include IRS audits of universities in areas including excessive compensation and unrelated …
July 18, 2011, 5:58 pm
Proposal Takes Aim at Charities That Avoid Taxes Offshore
Sen. Charles E. Grassley, senior Republican on the Senate Judiciary Committee, has introduced legislation that would deny some federal money to charities that put money in offshore accounts to avoid paying income taxes.
The Iowa senator has proposed barring such charities from getting grants from a federal program that helps prisoners re-enter society. The proposal follows an inquiry that he and several other lawmakers conducted last year into Boys & Girls Clubs of America.
Mr. Grassley’s move—an amendment to a bill pending in the Judiciary Committee to extend the so-called Second Chance Act—takes aim at unrelated business income tax, or UBIT. Those are taxes that charities owe on income they earn from businesses that are not directly tied to their charitable missions.
While moving money offshore to avoid those taxes isn’t illegal, Mr. Grassley said in a statement…
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