The IRS Attacks: Your College's Blindside

 I am a big fan of college football and spend most of my fall Saturdays watching football games. Sometimes I wonder what the coaches are thinking when they call certain plays. Last fall during a particularly exciting play where the UGA quarterback was sacked by the opposing team's defensive end, I wondered what the left tackle was thinking. Of course, he may have been thinking about the next play, or perhaps the post-game festivities, but I guarantee you that he was not thinking about the tax ramifications of the Nike insignia on the quarterback's jersey.

Though it may have been the last thing on the left tackle's mind, President Adams and the IRS have given it some thought. Corporate sponsorships are just one example of unrelated business income that is the prey of a new onslaught of IRS audits targeting colleges and universities. https://askcompetentlawyer.com/business-commercial-litigation/ UGA in particular has been targeted, and the IRS is auditing the income it receives from subsidiaries such as parking, catering, golf courses, and food services.

The IRS recently published the results, garnered through questionnaires sent to 400 schools, of a major compliance initiative for smaller colleges and universities. The IRS has set its sights on unrelated business income, such as that earned from corporate sponsorships, advertising, and facility rentals. Almost 50% of smaller colleges and universities (5,000 students or less) never filed Form 990-T, and thereby did not pay tax on such income.

Smaller colleges and universities nationwide should be in ready position for this IRS offensive. Tax controversy attorneys defend individual, corporate and non-profit organization clients against IRS audits.