Harvard University Audited as Part of IRS Probe of Nonprofits

Harvard University is among 40 academic institutions that will undergo federal audits this year in conjunction with an Internal Revenue Service review of nonprofit organizations’ tax-exempt status. The IRS sent questionnaires to 400 institutions of higher education in October 2008 seeking information on their fiscal management, investments, and use of endowment funds. The agency is looking into whether colleges’ tax exemptions should apply to income from activities not directly tied to their educational mission.

Full text article by Michael McDonald and John Lauerman is available via Bloomberg, 1/11/10.

Notre Dame, other nonprofits see property tax bills

The University of Notre Dame and other nonprofit institutions in St. Joseph County, Ind., are receiving property-tax bills for the first time as local officials take a closer look at facilities previously considered tax-exempt. Hamstrung by tight budgets and an Indiana state cap on property taxes, the county is now assessing levies on property owned by nonprofit groups but considered to be profit-making, such as the university’s bookstore and an on-campus restaurant. The South Bend school had previously paid taxes voluntarily on some off-campus properties it owns.
Full text article by Margaret Fosmoe is available via The South Bend Tribune, 12/21/09.

Pittsburgh Pushes Tax on College Students

A proposal to levy a 1 percent tuition tax on students at Pittsburgh colleges and universities threatens to drive a wedge between the city and the institutions credited with playing a major role in its transformation from an industrial to an education and medical center. Backers say the tax, which would add an estimated $16-million to the strapped city’s coffers, is a relatively small charge for the police, fire, and other services provided to Pittsburgh’s estimated 85,000 college students. Officials say the money would help the city narrow a pension-fund shortfall and keep library branches open. The Pittsburgh Council on Higher Education, which represents 10 local colleges, says the institutions inject millions into the city’s economy and that tens of thousands of students who live in Pittsburgh already pay parking, commuter, and entertainment taxes. The council is lobbying Pennsylvania legislators to adopt a statewide ban on tuition taxes.

Full text article by Kris Maher is available via The Wall Street Journal, 12/1/09.

Cuomo's pay-to-play rap for nonprofits

Dozens of New York State charities have been ordered by Attorney General Andrew Cuomo to take back illegal political contributions or risk losing their tax-exempt status. A spokesman for Mr. Cuomo’s office said an investigation found “widespread” donations by nonprofit groups to candidates and officeholders, including state legislators and New York City Council members, in violation of federal and state law. Many of the groups reportedly received government grants arranged by the politicians they supported.

Full-text post by Fredric Dicker and Sally Goldenberg is available via the New York Post, 10/23/09.

Senate Committee Passes Health-Care Bill with Charity Provisions

The Senate Finance Committee Tuesday passed health-care legislation that would allow small charities to receive a tax credit to help them provide health insurance to their employees.
The bill, approved by a 14-9 vote, would also require nonprofit hospitals to conduct “a community health needs assessment” at least once every three years and take other steps.

Full-text post by Suzanne Perry and Grant Williams is available via The Chronicle of Philanthropy, 10/13/09.

State Supreme Court gets hospital tax exempt case

The Illinois Supreme Court will hear oral arguments to determine if a nonprofit Catholic hospital is providing enough charity care to warrant tax-exempt status. The outcome of the case involving Provena Covenant Medical Center could affect nonprofit hospitals across the country.

Full-text post by Lindsey Tanner is available via The Chicago Tribune, 9/23/09.

Nonprofits Paying Price for Gamble on Finances

The New York Times reports on the wide range of nonprofit organizations struggling with debt, largely from issuing tax-exempt bonds during fatter times. More than twice as many charities issued such bonds in 2006 as in 1993, mostly to finance property and construction projects. Debt linked to those bonds rose from $98-billion to $311-billion during that period, adjusted for inflation, weighing down organizations ranging from major universities and arts institutions to tiny social-service providers.

Full-text post by Stephanie Strom is available via The New York Times, 9/23/09.

Acorn Orders Inquiry in the Wake of a Video

The Association of Community Organizations for Reform Now, with offices in 110 cities in 40 states, is the largest neighborhood-based antipoverty group in the country, using old-fashioned methods of door-knocking and noisy protests to push for local and national causes. The group, which has come under fire after employees were caught on camera appearing to encourage tax evasion and prostitution, said Wednesday that it was ordering an independent investigation.

Full-text post by The Associated Press is available via The New York Times, 9/16/09.

Minnesota Nonprofit Leaders Win New Law on Property-Tax Exemptions

Minnesota nonprofit leaders have won the final leg of their campaign to clarify state law governing charitable property-tax exemptions in the wake of what they considered a damaging Minnesota Supreme Court decision.

Full-text article by Suzanne Perry is available via The Chronicle of Philanthropy, 6.3.09.

The Obama Budget: What to Expect

Tax changes are likely, but health-care reform and emissions caps may have to wait.

Full-text article by Anne Kates Smith is available via Kiplinger's Personal Finance, May 2009.

IRA Mandatory Minimum Distribution Rule Waived for 2009

In a recently enacted law, individuals who are 70½ and older can keep all of their funds in their IRA without receiving a tax penalty. This waiver could detrimentally affect donations made under the IRA Rollover provision.

Full-text article available via the Association of Fundraising Professionals, 1.5.09.

Boston May Seek More Money From Nonprofit Institutions

Boston’s mayor is forming a task force to study how the city might increase the payments it receives from nonprofit institutions in lieu of taxes — especially the city’s numerous education and health-care organizations, reports The Boston Globe.

The universities and hospitals, which are exempt from property taxes because of their nonprofit status, pay voluntary fees to the city in varying amounts, the paper reports. If such Boston organizations were required to pay property tax, they would pay a combined $350-million to $400-million each year, city officials tell the paper. Instead, they give the city a combined $32.4-million, the Globe reports.

Full-text article by Donovan Slack is available via the Boston Globe, 12.9.08.

Massachusetts Lawmakers Consider Taxing Big Universities

In Massachusetts, legislators are considering taxing higher-education institutions with endowments over $1-billion, arguing that the universities don’t do enough for their surrounding neighborhoods considering their vast wealth.

Full-text article by Peter Schworm and Matt Viser is available via The Boston Globe, 5.8.08.

Where are all the charitable bequests?

Charitable bequests are becoming rare with only eight percent of Americans naming a charity in their will. The article comments on donor motivations and tax issues as they relate to charitable bequests.

Full-text article by G. Jeffrey MacDonald is available via The Christian Science Monitor, 11.19.07.