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Focus on Not-For-Profits: Holiday Cheer (Potentially) Related to the “Parking Tax”

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Yesterday the House of Representatives passed HR 1865, Taxpayer Certainty and Disaster Tax Relief Act of 2019 (the Act).
December 18, 2019

Yesterday the House of Representatives passed HR 1865, Taxpayer Certainty and Disaster Tax Relief Act of 2019 (the Act). The Act, in addition to including the extension of several expiring tax provisions and economic growth tax provisions, would retroactively repeal Internal Revenue Code (“IRC”) Section 512(a)(7). This is the Section of the IRC that increases unrelated business taxable income (UBTI) for the cost of providing certain transportation and other benefits to employees on a tax-free basis (the infamous “Parking Tax”).

The Act is expected to be passed by the Senate, and the President has indicated he would sign the measure.

Since the repeal is retroactive to the implementation of IRC Section 512(a)(7), refunds of taxes paid on Forms 990-T filed in the past will be available. The method of obtaining the refunds is not known at this time but most likely will require the filing of an amended return. There is, however, some hope that due to the controversial nature of the “Parking Tax,” the IRS may implement some type of simplified or automatic refund process.

We will continue to monitor these developments.

Please contact your RubinBrown advisor if you have any questions.

 

Readers should not act upon information presented without individual professional consultation.

Any federal tax advice contained in this communication (including any attachments): (i) is intended for your use only; (ii) is based on the accuracy and completeness of the facts you have provided us; and (iii) may not be relied upon to avoid penalties.

 

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