IRS May Test UBI at Private Schools

Jun 23, 2021, 1:36 PM

(from CliftonLarsonAllen) Unrelated business income (UBI) is expected to get more attention in IRS examinations. The IRS Exempt Organization Division was recently given a report card that showed “needs improvement,” for not effectively identifying and auditing key tax areas such as UBI. Private schools were one of six organization types identified by the Treasury Inspector General of Tax Administration as more likely to produce UBI. UBI tax positions are often a gray area, and your institution’s specific facts and circumstances may make a difference. A previous UBI initiative examining colleges and universities found most unrelated business activities were connected to fitness and recreation centers, sports camps, advertising, facility rentals, arenas and golf courses.