Thursday, January 9, 2020

Nonprofit "church" Parking Tax Ended by Congress: IRS Guidance on Refunds?

In a tax package agreed to on December 17, 2019, last year, Congress repealed a provision of the code widely known as the church parking tax. I wrote about it on Surly Sub Group when it was enacted in 2017 concerned about its massive probably unintended effect on nonprofits. It caused massive havoc in that world, and nonprofits, led by churches mounted a massive effort to get the provision repealed. It took two years, but they were successful. 

In P. L. 116-94 (found in section 302 at the bottom of that Act) Congress repealed the offending provision section 512(a)(7) retroactively.

Thus, even though the IRS spent significant time providing guidance on how to comply, and presumably large nonprofits around the country adjusted their parking situation dramatically, nonprofits and the IRS must now act as if none of that ever happened. Many nonprofits like universities and hospitals likely paid large 21% rate taxes on parking fringe benefits that they continued to provide to their employees.

What now? IRS needs to figure out how to expeditiously issue refunds.

Congress members just issued a letter to the IRS asking it to issue guidance as quickly as possible to let nonprofits know how to obtain these refunds. 

Philip Hackney

 

https://lawprofessors.typepad.com/nonprofit/2020/01/nonprofit-church-parking-tax-ended-by-congress-irs-guidance-on-refunds.html

Church and State, Current Affairs, Federal – Executive, Federal – Legislative, In the News | Permalink

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