Download Basics Of The Unrelated Business Income Tax (PIN) as a PDF document.
Tax-exempt institutions, in general, and universities, in particular, have been subjected to increased governmental scrutiny in recent years.
Of particular note have been initiatives by the Internal Revenue Service to police the tax-exempt sector. The IRS has undertaken a program of comprehensive audits, directed primarily at hospitals and universities, to examine all aspects of tax compliance by non-profits. In conjunction with this program, the agency issued its Final Examination Guidelines Regarding Colleges and Universities in August of 1994.
An area of focus in these audits, and of the Guidelines, has been the reporting of unrelated business taxable income. This is an area of taxation with which many in the non-profit sector are unfamiliar.
This guide has been prepared to provide a basic knowledge of the Federal scheme for taxing unrelated business income, in an attempt to increase awareness of Harvard's reporting obligations. As financial constraints lead many of our departments to consider alternative sources of revenue, the impact of this tax system is likely to increase. Hopefully, this guide will enable you to recognize activities which may produce unrelated business income.
Should you require additional information or advice, please call the Office of the General Counsel (495-1280) to speak with one of Harvard's attorneys. We will be happy to advise you.