FORM 990-T:
YOUR INSTITUTION MAY NOT BE REQUIRED TO DISCLOSE

The IRS has issued Notice 2007-45 http://www.irs.gov/pub/irs-drop/n-07-45.pdf which provides guidance to charities, including colleges and universities, regarding the public disclosure requirements for Form 990-T, Exempt Organization Business Income Tax Return. In August of 2006, Congress passed the Pension Protection Act of 2006, which included a number of significant reform measures directed toward the tax-exempt community. Colleges and universities have been specifically watching the resolution of whether they would be required to make their Forms 990-T publicly available, and if so, on what terms.

Notice 2007-45 treats private and public colleges differently in a material respect. Private colleges and universities, along with public universities that have received a Code Section 501(c)(3) determination letter, must make their Forms 990-T available to the public through one of two means: (1) the institution may publish the return through a widely available format on the internet; or (2) the institution may make the return available for public inspection during regular business hours by any individual at the institution's principal office. However, on a positive note, since the disclosure obligation applies to the institution and not the IRS, the IRS may not make the Forms 990-T available for public dissemination through sources such as Guidestar.

In contrast, state colleges or universities that have not sought recognition under Code Section 501(c)(3) are not required to disclose their Forms 990-T. Institutions that would be exempt from disclosure (assuming they do not have a 501(c)(3) ruling) are those qualified as state agencies, instrumentalities, political subdivisions or Code Section 115 entities.

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If you have any questions regarding these developments, please feel free to contact Marilee J. Springer or Michael Red.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.