Tax Tips for Higher Education

On November 4, 2020, the Security Summit warned of a new text scam created by thieves that trick people into disclosing bank account information under the guise of receiving the $1,200 Economic Impact Payment.

Marathon Bible College (MBC) is a private college exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(ii).  They are required to file Form 990 annually.

MBC’s Controller called us to ask about some suspicious emails that their students had been receiving lately.  “Is there a second round of $1,200 Economic Impact Payments going out?”

This year, with so many organizations conducting virtual conferences and trade shows, the question arises as to whether these events might be considered unrelated business activities.

Denali Christian College (DCC) is a private college exempt under Internal Revenue Code section 501(c)(3) and 170(b)(1)(A)(ii).  They are required to file Form 990 annually.

DCC held a “virtual conference” in August 2020.  Historically, they’ve held this conference – “Alaska:August:Acts” – in person, on-site each summer for the past 15 years.

In a recent video meeting, DCC’s Chief Financial Officer called to ask, “Could our conference, because it was held virtually this year, be somehow construed as an unrelated business activity by the IRS because it was not in-person as in all other years?”

“Great question,” we replied. . .

Although in most cases, you cannot contact the IRS via email, they are working on some technologies…

Have you heard?  For 2020, you will not use Form 1099-MISC for fees paid to independent/outside contractors for services as we’ve done in the past.  There is a new Form 1099-NEC, Nonemployee Compensation.

ISSUE: Some institutions received funding through the Department of Education under the “HEERF” program (CARES Act Section 18004(a).  Now, ED has released reporting requirements regarding all four types of these funds. SITUATION: Denali Christian College (DCC) is a...