Ways and Means Subcommittee to Hold May 8 Hearing on IRS College and University Compliance Project
The House Ways and Means Oversight Subcommittee will hold a hearing to examine the findings of the Internal Revenue Service's College and University Compliance Project. The hearing will take place Wednesday, May 8, at 2 p.m.
In announcing the hearing, Subcommittee Chairman Charles Boustany, Jr. (R-La.) expressed concern about the compliance project's findings, stating that "the Subcommittee has an obligation to explore the root of these alarming findings on the audit of our nation's higher education providers."
The goal of the IRS project, which began with a questionnaire mailed to 400 institutions in 2008, was to learn more about how colleges and universities operate, particularly in the areas of endowment management, compensation and unrelated business activities. In 2010, the IRS released an interim report (pdf) of the project, which identified unrelated business activities and compensation as key areas of focus for the examination portion of the project.
On April 25, the IRS released the project's final report (pdf), which focused on findings from examinations of 34 institutions. According to the report, the examinations resulted in:
The report shows that 20 percent failed to meet the IRS "rebuttable presumption of reasonableness" test on compensation.
The report also notes that since the colleges and universities examined were not randomly selected, readers should not assume that the compensation and unrelated business income activity practices of the examined institutions represent the entire field.
Updated May 3, 2013
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