Unrelated Business Income Tax (UBIT) Analyzer
The world of nonprofit tax issues has become increasingly complex. Throughout the years, the IRS has become much more sophisticated and active in the arena of unrelated business income. Hundreds of audits have been performed at the nation’s largest health care organizations, and colleges and universities are noting some startling results as the IRS continues its industry focus. The ramifications of noncompliance can be disastrous to the organization. The IRS has the ability to propose fines, sanctions, and even rescinding the exempt status of the organization.
To address these issues, LarsonAllen has developed a comprehensive unrelated business income tax (UBIT) analyzer. The purpose of this analyzer is to examine the organization’s current activities to assess whether there are issues related to compliance in the area of unrelated business income. The product is well designed to uncover issues the finance or accounting department may not even be aware of. We utilized IRS exempt organization resources, IRS audit experience of our own clients, our experience with thousands of tax-exempt organizations, and discussions with IRS officials to build a product that uncovers those issues needing to be addressed.
During the analysis phase of this assessment, a member or members of LarsonAllen’s exempt tax services group will conduct interviews of a variety of staff (non-accounting personnel included), on-site tours, interviews of audit team members, and other methods to gain insight into the organization's operations. The product of the analysis phase is a presentation of the findings of the assessment with the appropriate personnel of your organization. We will walk through the issues uncovered and the possible avenues of resolution. In addition, we are available throughout this implementation phase assisting in expense allocations and development of plans to minimize UBI exposure.
We have found that key stakeholders (management and boards) want to follow the federal and state laws and regulations, but limited resources and knowledge of the topic create challenges in identifying those issues that may affect them. As a result of this process, the organization may correct past ills and gain insight on how it may structure certain activities to manage any potential UBIT issues.
Contact us for more information.