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Senate Panel Reviews IRS Report on Tax-Exempt University Compliance

May 10, 2013—The House Ways and Means Oversight Subcommittee held a May 8 hearing on the Internal Revenue Service (IRS) Colleges and Universities Compliance Project Final Report released April 25 [see Washington Highlights, April 26]. The hearing focused on the IRS’s findings and examined the causes for the compliance issues found through a sample of tax-exempt college and university audits.

In his opening statement, Subcommittee Chair Charles Boustany (R-La.) stated, “Over the last two decades, tax-exempt organizations have grown increasingly complex in their organizational structures and operations. This has made it more difficult for the IRS to conduct oversight of the sector.  Lending to this complexity is the prevalence of profit-generating arms and investment activities within the tax-exempt organizations that may be subject to the unrelated business income tax – or UBIT.”

The hearing’s only witness, Lois Lerner, director, IRS Exempt Organizations Division, presented a summary of the IRS’s findings. She noted that as a result of the examinations of colleges and universities, the IRS plans to look at unrelated business income more broadly. Additionally, the IRS plans to ensure that tax-exempt organizations are aware of the importance of using appropriate comparability data when setting compensation.


Matthew Shick, JD
Director, Gov't Relations & Regulatory Affairs
Telephone: 202-862-6116


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806