NAICU - IRS Planning Review of Charitable Activities of Colleges and Universities

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IRS Planning Review of Charitable Activities of Colleges and Universities

NAICU Washington Update

May 28, 2008

Lois Lerner, director of exempt organizations with the Internal Revenue Service, recently announced that the IRS will be looking at public and private four-year colleges and universities to ensure the institutions are fulfilling their charitable missions. As many as 400 to 500 colleges and universities will receive a questionnaire from the IRS in the near future.

The IRS will be studying the "commensurate doctrine" – the concept that a charitable organization should be providing services that are commensurate with its resources. Besides demographic and organizational information, the areas covered in the questionnaire will be (1) activities reportable on the Form 990-T; (2) endowment funds, including types of funds, whether they are restricted or unrestricted, and the types of investments used; and (3) executive compensation, with information on the six highest paid employees at the institution, including coaches.

Last year, the IRS conducted a similar study of hospitals. No specific time frame for the release of the study findings has yet been announced.

Contact

Karin Johns
karin@naicu.edu