These comments were submitted to the IRS on April 19, 2018
Washington Nonprofits, on behalf of the more than 30,000 federally-recognized charitable nonprofits in Washington State, urges the U.S. Department of Treasury and the Internal Revenue Service to postpone the effective date of the new unrelated business income tax (UBIT) provisions in Internal Revenue Code Section 512 (a)(6) and (a)(7) until a reasonable time after the Service issues guidance clarifying the new tax liability triggered by new those sections.
The first UBIT Form 990-T quarterly tax returns are due – with payments – on May 15. Yet without the needed direction from the IRS, charitable nonprofits cannot determine what constitutes unrelated business income subject to the penalty. The absence of guidance from the Service puts charitable nonprofits in the untenable position of having to comply with the unknown, putting them unfairly at risk of filing inaccurate reports, making insufficient or inaccurate payments, and suffering other adverse consequences.
Therefore, Washington Nonprofits urges you to postpone the quarterly UBIT filing and payment requirements relating to these new provisions until a reasonable time after the IRS provides the necessary clarity to the nonprofit sector.