Docstoc

Unrelated Business Income Resource

Document Sample
Unrelated Business Income Resource Powered By Docstoc
					                           Unrelated Business Income Tax
                                     Compliance Checklist
The purpose of the following questionnaires is to request your assistance in fulfilling the University’s annual tax
reporting requirements. Your assistance is vital to ensuring that the University completely and accurately
complies with mandated reporting provisions covering (a) unrelated business income, (b) foreign activities, (c)
activities in other states, and (d) political and lobbying activities,

UNRELATED BUSINESS INCOME TAX

The IRS requires tax-exempt organizations such as WVU to declare and pay tax on net income from any
activity unrelated to the basic purposes for which the income tax-exemption was granted. WVU’s tax-exempt
purposes are primarily education, research, and patient care/health care.

The IRS considers an activity to be unrelated if it meets all of the following criteria:
      -it is not substantially related to the organization’s tax-exempt purposes,
      -it is a trade or business (defined by the IRS as any activity carried on for the production of income from
      selling goods or performing services),
      -it is regularly conducted (frequency and continuity are key in this assessment).

WVU is not prohibited from engaging in activities which generate unrelated business income, but the IRS
requires that we report net operating results, including net losses, from each unrelated activity.

The attached questions are designed to help assess the revenue producing activities conducted in your
department during the fiscal year. Only consider revenue p roduced from sources outside WVU; do not report
revenue produced from sales of goods and services to other WVU departments. If your area does not generate
any revenues, or if the revenue is clearly related to the stated exempt purposes of the University, please make a
note on the questionnaire.

The Tax Services Office will review the completed questionnaires, and you may be asked to provide further
information about potentially unrelated activities.




RESPONDENT NAME AND TITLE:                    ________________

PHONE#:                                       ____________________________________

DEPARTMENT:                                   ____________________________________




                                                                                                                    1
PART I
                                                                                YES            NO
  A. Does your department generate external revenues from any of                []             []
     the following activities, which are examples of potential sources
     of unrelated business income? Include sources of revenue even
     if it results in a net loss after deducting related expenses

     If Yes, indicate which:

         1. Advertising in printed publications, on TV/Radio broadcasts, billboards, scoreboards, internet or
             in other printed materials.
         2. Affinity (Credit/Debit Card) programs where service is provided to a card vendor (This is an
             agreement where we allow usage of the WVU logo and marketing to our students and/or
             employees of credit cards by a credit card company)
         3. Athletic facility use for non-WVU events, or recreational facility use by the public (e.g.
             swimming pool rental for a private party)
         4. Bookstore and gift shop sales to the public by WVU owned and operated facilities (excludes
             third party vendors)
         5. Catering and food service sales to the public by WVU owned and operated food service
             departments (excludes third party vendors)
         6. Commercially sponsored research
         7. Computing resource leasing (software maintenance and support or server space rental to non-
             WVU entities)
         8. Dormitory rentals to the public for non-WVU events (e.g. Microsoft rents a section of our dorms
             for their employees to stay in while in Morgantown at a conference)
         9. Entertainment events such as concerts, movies, etc of non-WVU events (e.g. an Alan Jackson
             concert or Seseme Street Live!)
         10. Exclusive provider and sponsor agreements with corporate sponsors such as Coke or AT&T
         11. WVU owned hotel and restaurant services open to the general public
         12. Hospital non-patient sales such as a pharmacy or medical equipment supplies for sale to the
             general public not just to WVUH patients
         13. Leasing and rental activities such as private rentals of the Erickeson Alumi Center, rental of
             conference/meeting rooms or other facilities for private events such as weddings, receptions,
             banquents, etc to non-WVU entities
         14. Licensing agreements where services are provided to the licensee
         15. Merchandising operations
         16. Parking revenue from private companies or contract arrangements
         17. Participation or ownership ventures with non-WVU entities
         18. Travel tour programs
         19. Broadcast rights
         20. Royalities from oil and/or gas rights
         21. Mailing list rental or purchase
         22. Credit card promotionals – fees received for allowing advertising flyers to be included in a
             University mailer (e.g. an advertisement inserted in employee paychecks)
         23. Power generation produced by WVU facilities and sold to a non-WVU entity
         24. Other sales and services provided to the public
         25. Other activities that are not directly related to the tax-exempt purposes of the University
             (education, research, and patient care)

                                                                                                            2
Activity #1: Please give a brief description of each activity marked above and answer questions 1-6 for each
activity. Please include the frequency of transactions, the type of customer, the goods sold or services provided
and an estimate of the total revenue for the last fiscal year for any potentially unrelated activities.

__________________________________________________________________________________________




GL funding string:    ________________________________________________________________________

                                                                    YES              NO
       Is the activity:
       1. conducted for the purpose of generating income?           []              []
       2. conducted on a regular basis?                             []              []
       3. related to the University’s exempt purpose?               []              []
       4. performed by volunteers?                                  []              []
       5. conducted via the internet – ebusiness?                   []              []
       6. conducted for the convenience of the University
            students, faculty, staff, or patients?                  []              []




Activity #2: Please give a brief description of each activity marked above and answer questions 1-6 for each
activity. Please include the frequency of transactions, the type of customer, the goods sold or services provided
and an estimate of the total revenue for the last fiscal year for any potentially unrelated activities.

__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________

GL funding string:    ________________________________________________________________________

                                                                    YES              NO
       Is the activity:
       1. conducted for the purpose of generating income?           []              []
       2. conducted on a regular basis?                             []              []
       3. related to the University’s exempt purpose?               []              []
       4. performed by volunteers?                                  []              []
       5. conducted via the internet – ebusiness?                   []              []
       6. conducted for the convenience of the University
            students, faculty, staff, or patients?                  []              []



                                                                                                                    3
Activity #3: Please give a brief description of each activity marked above and answer questions 1-6 for each
activity. Please include the frequency of transactions, the type of customer, the goods sold or services provided
and an estimate of the total revenue for the last fiscal year for any potentially unrelated activities.

__________________________________________________________________________________________




GL funding string:    ________________________________________________________________________

                                                                    YES              NO
       Is the activity:
       1. conducted for the purpose of generating income?           []              []
       2. conducted on a regular basis?                             []              []
       3. related to the University’s exempt purpose?               []              []
       4. performed by volunteers?                                  []              []
       5. conducted via the internet – ebusiness?                   []              []
       6. conducted for the convenience of the University
            students, faculty, staff, or patients?                  []              []




Activity #4: Please give a brief description of each activity marked above and answer questions 1-6 for each
activity. Please include the frequency of transactions, the type of customer, the goods sold or services provided
and an estimate of the total revenue for the last fiscal year for any potentially unrelated activities.

__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________
__________________________________________________________________________________________

GL funding string:    ________________________________________________________________________

                                                                    YES              NO
       Is the activity:
       1. conducted for the purpose of generating income?           []              []
       2. conducted on a regular basis?                             []              []
       3. related to the University’s exempt purpose?               []              []
       4. performed by volunteers?                                  []              []
       5. conducted via the internet – ebusiness?                   []              []
       6. conducted for the convenience of the University
            students, faculty, staff, or patients?                  []              []

Please attach a separate sheet for each additional activity

                                                                                                                    4
Part II
If you have any of the following please complete each applicable section or mark N/A on any that do
not apply. Please address all sections.

   A. Adve rtising & Sponsors hip
                                                                    YES         NO
   1. Does your organization or operating unit publish, sell
         or distribute the following?
         a. Athletic or cultural events programs                    []          []
         b. Phone directories                                       []          []
         c. Magazines and journals                                  []          []
         d. Newsletters                                             []          []
         e. Yearbooks                                               []          []
         f. Other Publications:
             _______________________________________
             _______________________________________
             _______________________________________

   2. Do any of these publications contain paid advertising?        []          []
      If yes, please attach a recent copy of the publication.

   3. Is the solicitation of advertising done by students as part
      of their educational curriculum?                              []          []
      (Please answer separately for each publication.) If no,
      describe the manner in which advertising is being sold.
      ______________________________________________
      ______________________________________________
      ______________________________________________

   4. Does your organization or operating unit receive gifts or
      revenue directly from corporations?                           []          []
      If yes, please indicate whether your organization or
      operating unit provides any of the following benefits for
       the corporate sponsor in exchange for the gift and
      provide copies of any sponsorship contracts.
          a. Special promotions of corporation’s product
               or service                                           []          []
          b. Instruction to public to buy a product or service      []          []
          c. Endorsement of the corporation’s product or
               service                                              []          []
          d. Inducement to buy, sell, or lease sponsor’s
               product or service                                   []          []
          e. Distribution or product price and information          []          []

   5. Is the amount of sponsorship payment contingent upon
      level of event attendance or broadcast ratings?               []          []



                                                                                                      5
B. Services
                                                               YES   NO
1. Does your organization or operating unit receive revenue
   from the sale of any of the following services to persons or
   entities outside the University?                             []   []
   If such an arrangement exists, please describe in more
   detail the nature of the service provided, to whom the
   service is provided, and the manner in which you
   are compensated for the service.
   ____________________________________________
   ____________________________________________
   ____________________________________________

       a. Copying, printing, binding, or graphic design        []    []
       b. Audio or video production, repair, duplication       []    []
       c. Photography or cartography services                  []    []
       d. Accounting, billing, collection, communication,
          record-keeping                                       []    []
       e. Personnel services, (recruitment, testing,
          training, and placement)                             []    []
       f. Other services (please describe)
          _______________________________________
          _______________________________________
          _______________________________________

2. Does your organization or operating unit receive revenue
   from consulting services to persons or entities outside
   the University?                                             []    []
    If yes, please describe the nature of the
   consulting services and tell who specifically
    provides these services.
   ____________________________________________
   ____________________________________________
   ____________________________________________

3. Does your organization or operating unit receive
   revenue from sale of any of the following to persons
   or entities outside the University?                         []    []
       a. Internally developed software                        []    []
       b. Computer time to persons or entities outside
            the University                                     []    []
       c. Other types of computer services (e.g.
            information retrieval, messaging services, etc.)   []    []
       d. Computer software courses                            []    []




                                                                          6
                                                              YES   NO
4. Does your college, organization or operating unit offer
   sponsor travel tours?                                      []    []
   If yes, please provide information regarding the nature
   of the travel tours.
   _____________________________________________
   _____________________________________________
   _____________________________________________

5. Does your college, organization or operating unit sell
   or rent mailing lists to taxable entities or tax-exempt
   entities that are not organized for charitable purposes?   []    []

6. Does your organization or operating unit receive
   revenue from special laboratory testing or services?       []    []

C. Products

1. Does your organization or operating unit sell any
   products, merchandise, or supplies to persons or
   entities outside the University?                           []    []
   If yes, please explain what is sold, to whom it is sold
   and the manner of payment for goods sold.
   __________________________________________
   __________________________________________
   __________________________________________

2. Does your organization or operating unit manufacture
   any equipment or products for sale to persons or
   entities outside the University?                           []    []
   If yes, please explain your manufacturing or
   product development activities.
   __________________________________________
   __________________________________________
   __________________________________________

3. Does your organization or operating unit conduct
   mail-order sales?                                          []    []

4. Does your organization or operating unit receive revenue
   from the sale of products on the Internet?                 []    []

5. Does your organization or operating unit receive
   revenue from the sales of natural resources?               []    []

6. Does your organization or operating unit receive
   Revenue from the sale of biological products or
   agricultural by-products?                                  []    []

                                                                         7
D. Rental Arrangements
                                                            YES   NO
1. Is space (land, buildings, rooms) rented to non-
   WVU persons or entities?                                 []    []

2. Is 10% or more of the rental charge attributable
   to personal property (e.g., furniture or equipment)?     []    []

3. Are personal services provided (e.g., security, food,
   maid, or linen service, operating microphone and/
   or lights)?                                              []    []

4. Did WVU incur debt to purchase the property
   (identify the property)?                                 []    []

5. Is the leasing organization non-profit?                  []    []

6. Is the space leased for educational, research or
   health care purposes?                                    []    []

7. Is WVU actively involved in the presentation of
   programs conducted in the rented space?                  []    []

8. Is the rental rate lower than commercial rates?          []    []

9. Is the rent based directly or indirectly on the income
   or profits derived from the leased property?             []    []

10. Does your organization or operating unit lease
    or rent any other facilities not identified above
    to the general public?                                  []    []
    If yes, please describe.
    ________________________________________
    ________________________________________
    ________________________________________




                                                                       8
E. Foreign Activities

The IRS requires that we disclose certain foreign activities. These disclosures include
whether the University has ownership or signature authority over any foreign bank accounts,
whether the University has any offices in foreign countries, and other various activities. To
comply with these reporting requirements, we are asking for your assistance in identifying all
foreign activities and transactions conducted by your department.
                                                                        YES             NO
1. Foreign Accounts

Does your department have signature authority over a
foreign bank account?                                                  []              []
If yes, please complete the questions below.

Country in which account is held:      ____________________________________
Bank Name:        ______________________________________________________
Account Number: ______________________________________________________
Name Listed on the Account:      __________________________________________
Approximate Account Balance asof 6-30-09 (U.S. dollars): __________________

2. Foreign Officers

Did your department maintain an office in a foreign country
at any time during the fiscal year?                                    []              []
If yes, please provide the name of the country below.

Foreign country in which an office is maintained:        ________________________

3. Foreign Grants

Did your department make any grants, directly or indirectly
through a subcontract, to a foreign entity or person during the
fiscal year?                                                           []              []
If yes, please complete the questions below for
payments made during the fiscal year ended 6-30-09.

Payee Name:      ______________________________________________________
Country Where Payee Resides: __________________________________________
Total Amount of Payments:    __________________________________________

4. Foreign Employees

Does your department have any employees that reside and work
in a foreign country? (i.e. a British citizen employed and working     []              []
in England as part of the WVU in London overseas program)
If yes, please provide further details.
______________________________________________
______________________________________________
______________________________________________
                                                                                             9
                                                                     YES   NO
5. Investments in Foreign Entities

Has your department made any investment in a foreign
partnership, corporate entity, or other form of business?            []    []
If yes, please provide further details.
_____________________________________________
_____________________________________________
_____________________________________________

F. Other State Activities

Does your department conduct business in, or derive revenues
from activities in any other state outside of West Virginia?
(Do not consider purchases of goods and services.                    []    []
If yes, please indicate the name of the state,
and the nature of the activity within that state.
______________________________________________
______________________________________________
______________________________________________

G. Commercial Sponsored Research

1. Is research performed for a person or entity
   other than the federal or state government?                       []    []

2. Is the research directly related to actual patient
   care or to the education of students?                             []    []

3. Is the research an investigative activity done to explore
   an intellectual question or to validate a scientific hypothesis
   in which the University has an academic interest?                 []    []

4. Is the research the type ordinarily carried on
   incident to a commercial operation, such as ordinary
   testing or inspection of materials or products?                   []    []

H. Partnerships and Joint Ventures

1. Does the activity generate revenue from participation
   in a partnership or joint venture with a non-WVU party?           []    []

2. Has this activity resulted in a Form K-1 being received?          []    []
   If so, please provide a copy of the Form K-1 to Tax Services.

3. Does the activity generate revenue from an entity directly
   Related to WVU?                                                   []    []



                                                                                10
                                                                               YES            NO
   I. Political Activities or Expenditures

   Has your department engaged in any political activity or
   incurred any political expenses, as defined below, during
   fiscal year 2009?                                                           []             []
   If yes, please provide a detailed description of such activities,
   and an estimate of the total expenditures incurred.
   ________________________________________________
   ________________________________________________
   ________________________________________________

Definition:
Political activities/expenditures are those intended to influence the selection, nomination,
election, or appointment of anyone to a federal, state, or local public office, or office in a
political organization, or the election of Presidential or Vice Presidential electors. It does not
matter whether the attempt succeeds. Expenditures include a payment, distribution, loan,
advance, deposit, gift of money, or anything of value. It also includes a contract, promise, or
agreement to make an expenditure, whether or not legally enforceable.

   J.   Lobbying Activities or Expenditures

   Has your department engaged in any lobbying activity or
   incurred any lobbying expenses, as defined below, during
   fiscal year 2009?                                                           []             []
   If yes, please provide a detailed description of such activities,
   and an estimate of the total expenses incurred.
   ________________________________________________
   ________________________________________________
   ________________________________________________

Definition:
There are two types of lobbying activities/expenditures required to be reported:
   1. Direct lobbying activities or expenditures - incurred for the principal purpose of
      communicating to influence legislation with either (a) any member or employee of a
      legislative body, or (b) any government official or employee who may participate in the
      formulation of legislation. This communication must refer to specific legislation and
      reflect a view on such legislation. “Legislation” includes Acts, Bills, Resolutions, or
      similar items proposed at the federal, state or local level.
   2. Grassroots lobbying activities or expenditures - incurred for communications, which
      attempt to influence any legislation through an attempt to affect the opinions of the
      general public or any part of the general public. This type of lobbying refers to specific
      legislation, reflects a viewpoint and encourages recipients to take action with respect to
      the specific legislation. A communication encourages a recipient to take action when it:
          a. states that the recipient should contact legislators;
          b. states a legislator’s address, phone number, etc.;

                                                                                                     11
           c. provides a petition, tear-off postcard, or similar material for the recipient to send
              to the legislator; or
           d. specifically identifies the position of one or more legislators who will vote on that
              legislation.
The following are not regarded as lobbying activities or expenditures:
          a. Engaging in non-partisan analysis, study, or research and making such work
              available to the general public or to government bodies, officials, or employees.
              The work may advocate a particular position or viewpoint so long as there is a
              sufficiently full and fair exposition of the pertinent facts to enable the public or an
              individual to form an independent opinion or conclusion.
          b. Responding to a government body’s or committee’s written request for technical
              advice.
          c. Appearing before, or communicating with any legislative body whose action
              might affect the organization’s existence, powers and duties, tax-exempt status, or
              deductibility of contributions to the organization as opposed to affecting merely
              the scope of the organization’s future activities.
          d. Routine communications with government officials or employees.




                                                                                                  12

				
DOCUMENT INFO
Description: Unrelated Business Income Resource document sample