We have known for some time that the IRS was planning a compliance project targeting colleges and universities. In today’s email was a press release from the IRS indicating that the compliance project is now upon us. Excerpt:
Approximately four hundred U.S. colleges and universities will begin receiving compliance questionnaires from the Internal Revenue Service in the next few days as part of the agency’s focused effort to study key areas in the tax-exempt community. The college and university questionnaire will focus on unrelated business income, endowments and executive compensation practices. The questionnaires are being sent to a cross-section of small, mid-sized and large private and public four-year colleges and institutions.
The Questionnaire is part of the Colleges and Universities Compliance Project. The IRS says in the press release that, after it receives responses, it will analyze the results of the compliance questionnaire and conduct examinations for a sample of the organizations (i.e. the lucky winners).
Please note that the Questionnaire compiles a lot of detailed information from colleges and universities about the benefits they provide to executives. Some of the items included are:
The compliance project is patterned after the one targeting hospitals over the last couple of years. (Read the IRS’s summary of the results of that project here.) Many colleges and universities will likely want to assemble a group of professionals, consisting of counsel and others, to assist in this project. (In other words, better to assemble them now in preparing the response, than later when notification of an audit has been received.)
Important links:
Colleges and Universities Compliance Project Website
Actual Compliance Questionnaire Being Sent to Colleges and Universities
Instructions for the Compliance Questionnaire
Cover letter Being Mailed to Colleges and Universities