Legislation signed December 20, 2019 retroactively repealed Internal Revenue Code Section 512(a)(7), which increased unrelated business taxable income by amounts paid or incurred for qualified transportation fringes. The IRS released guidance this week on how to go about obtaining refunds if an organization incurred any tax related to qualified transportation fringes.
Internal Revenue Code Section 512(a)(7) required an organization to report any amounts incurred as qualified transportation fringes beginning January 1, 2018. Therefore, fiscal year filers may have had unrelated business income reported on a 2017 Form 990-T while any calendar year organizations reported and paid tax on a 2018 Form 990-T. Organizations that wish to claim a refund or credit of the unrelated business income tax reported on Form 990-T for 2017 or 2018 under 512(a)(7) should do so by filing an amended 990-T.
The IRS has detailed instructions on their website on how to amend: https://www.irs.gov/forms-pubs/how-to-claim-a-refund-or-credit-of-unrelated-business-income-tax-ubit-or-adjust-form-990-t-for-qualified-transportation-fringe-amounts
If you need assistance to recuperate taxes incurred under IRC Section 512(a)(7) Wegner is here to help. Please reach out to Amanda VanNatta, Senior Manager, Not for Profit Tax Specialist with any questions at (608) 442-1991.
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