It appears that the IRS may be close to providing guidance on the “pay taxes on your costs of employee parking” provision in I.R.C. Section 512(a)(7) – and it may include penalty relief.



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 Accounting Team has been closely watching the issue of “imputed income” for employee parking (and other fringe benefits) issue included in Internal Revenue Code Section 512(a)(7) as imposed upon us by the “Tax Cuts and Jobs Act” of 2017.  This is one of the hottest issues for Christian colleges (and all not-for-profit organizations) of 2018.  It is kind of shocking that we are into October with no clear guidance on this issue.  [For more context, see Tax Tips on June 27, 2018 – “Qualified Parking as UBIT, Part 2”]

“Anything new on the parking UBIT stuff?” they ask.

“Nothing official yet,” we answer.  “However, Treasury officials, speaking at a recent conference, did give us some indication that guidance could be out soon.  And, it may include penalty relief.”



From the TEGE Joint Council Sesssion, 9/11/18:

“Going forward, things that we are currently working on, we are currently working on guidance under 512(a)(7) and the rules for qualified transportation fringe benefits. We’ve heard lots of comments and the impact on small organizations. We’re considering whether penalty relief is appropriate and working to get this out as soon as possible.” [underline added]



  • I.R.C. Section 512(a)(7) includes a provision whereby your institution may be required to “impute” income – and pay taxes – on the cost of providing employee parking.
  • We have repeatedly reported on this issue in “Tax Tips” (see issues dated 6/27/18, 7/18/18, and 7/25/18)
  • There are five bills in Congress that would repeal this rule.
  • It seems the IRS/Treasury is very close to providing some type of guidance in this arena – stay tuned.


Specific questions? Email Dave Moja

The information provided herein presents general information and should not be relied on as accounting, tax, or legal advice when analyzing and resolving a specific tax issue. If you have specific questions regarding a particular fact situation, please consult with competent accounting, tax, and/or legal counsel about the facts and laws that apply.

© 2018 Christian College Resources, Inc.