Posted on 10/20/2008 2:00:13 PM PDT by bs9021
Brother, Can You Spare an Endowment?
by: Bethany Stotts, October 20, 2008
The Internal Revenue Service (IRS) has issued a new questionnaire which asks some tough questions of college leaders. The new compliance questionnaire, labeled the first stage of the Colleges and Universities Compliance Project by the IRS, was sent to 400 American universities and colleges on the first of this month.
It delves into schools financial information with considerable depth. Among other things, the questionnaire will gather information from the schools about how they report revenues and expenses from their trade or business activities, classify their activities as exempt or taxable activities, and calculate and report income or losses on taxable activities, states the IRS press release. The questionnaire also will gather information regarding how the organization invests and uses its endowment funds and determines compensation of certain highly paid individuals.
And questions provided on the sample form range from those of executive compensation (for the top six highest-paid employees) to whether colleges monitor their use of endowment funds to ensure that donors wishes are kept.
According to Eric Keldermann with the Chronicle of Higher Education, The questionnaire is meant to take an in-depth look at potential discrepancies between the way institutions operate and how they report their activities to the IRS.
While the IRS will not publicly report the data from individual institutions, the information could trigger audits and even penalties for the colleges, as well as more-minor actions alerting the institutions to their errors.
Considering that the IRS will also issue a report on its findings, the new data might be used by senators such as Sen. Chuck Grassley (R-Iowa) to push for more regulation of colleges endowments and financial reporting....
(Excerpt) Read more at campusreportonline.net ...
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