The Internal Revenue Service will soon take steps to peek into the bookkeeping of 400 colleges and universities across the United States, IRS spokesperson Steven Pyrek said Tuesday.
Specifics of the questionnaire have not yet been released, but the general goal is to gather information on several “higher education-related” financial issues.
“We’re going to be looking at how the schools use their endowment fund,” Pyrek said. “We’re going to be looking at compensation of officials. We’re also going to be looking at what’s called unrelated business income.”
Pyrek compared the unrelated business income at colleges and universities to taxable revenue generated by a tax-exempt museum gift shop.
These types of organizations may be exempt from taxes for certain income, but there may still be other income they bring in that is taxable, and the IRS requires they report and pay taxes on that income.
Although the list of colleges and universities that will receive the questionnaire is still under wraps, the University of Wisconsin-Madison could potentially receive a questionnaire.
“I can tell you that we’re going to be looking at both private and public colleges and universities,” Pyrek said. “We’re going to be looking across the board at different sizes, the small and the medium and the large universities and colleges.”
Pyrek said he was unsure if UW or other Big Ten schools would be more likely than other colleges and universities to receive the questionnaire.
“Even if a particular school were to get one, we wouldn’t be able to say that we had sent one,” Pyrek said. “The school would be able to say that they received one.”
UW System spokesperson David Giroux said UW has not been notified of receiving a questionnaire from the IRS.
“Our finance people at the system administration office have not heard anything about this,” Giroux said. “This is a public university. All of our books are open.”
The questionnaires are likely to be released by the end of the month, Pyrek said, adding the timeline is subject to change.
“In the next couple of weeks, we’re going to be mailing these things out, and when we do, we’re going to be having some announcements about the program,” Pyrek said.
