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The IRS University Compliance Project Report on UBIT Issues: Roadmap for Enforcement...Reform...or Repeal?

National Center on Philanthropy and the Law, New York, NY, October 2013

44 Pages Posted: 7 Nov 2013  

John D. Colombo

University of Illinois College of Law

Date Written: October 1, 2013

Abstract

The recent completion of the IRS College and University Compliance Project again raises questions about the rationale for and purpose of the Unrelated Business Income Tax (UBIT). This paper addresses these questions in three main parts. Part I reviews existing UBIT law, particularly as it applies to colleges and universities. The second part is a short summary of the IRS findings on UBIT compliance. The final part then examines whether the UBIT should be reformed or even repealed. The paper concludes that while expansion of the UBIT to an all-inclusive commerciality tax (a proposal I have made in previous papers) is still my preferred solution, absent such reform, Congress should consider simply repealing the UBIT and relying on disclosure and non-tax incentives to control commercial activity by charities.

Suggested Citation

Colombo, John D., The IRS University Compliance Project Report on UBIT Issues: Roadmap for Enforcement...Reform...or Repeal? (October 1, 2013). National Center on Philanthropy and the Law, New York, NY, October 2013. Available at SSRN: https://ssrn.com/abstract=2350468 or http://dx.doi.org/10.2139/ssrn.2350468

John David Colombo (Contact Author)

University of Illinois College of Law ( email )

504 East Pennsylvania Avenue
232 Law Building
Champaign, IL 61820
United States
217-333-7985 (Phone)
217-244-1478 (Fax)

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