The Internal Revenue Service (IRS) recently released proposed regulations regarding Unrelated Business Income Tax (UBIT). The 2017 Tax Cuts and Jobs Act (TCJA) made big changes to UBIT that have been widely unpopular among nonprofits. A recent article for The Non Profit Times examines the proposed regulations from the tax bureau.
Under the IRS proposal, nonprofits would sort their unrelated business income into various categories, with about category designations. Under previous regulation proposals, there would have been dozens or even hundreds of separate categories. Starting in mid-June, the public will have a 60-day window to make comments on the proposed regulations.
While the proposed rules are perhaps the best outcome for nonprofits, given the UBIT rules established by the TCJA, many nonprofit leaders will continue to lobby for the repeal of IRS Code Section 512(a)(6), where these provisions lie.
For further details, click here to read the article in full.