Neal, Lewis Call for UBIT Refund Guidance

NEAL AND LEWIS CALL ON IRS TO ISSUE REFUND GUIDANCE TO TAX-EXEMPT ORGANIZATIONS PENALIZED BY HARMFUL GOP TAX LAW

Jan 8, 2020

WASHINGTON, DC — Today, Ways and Means Committee Chairman Richard E. Neal (D-MA) and Ways and Means Oversight Subcommittee Chairman John Lewis (D-GA) released the following statement, calling for the Internal Revenue Service (IRS) to provide refund guidance to tax-exempt organizations that paid a 21 percent unrelated business income tax (UBIT) on parking and transportation benefits provided to employees. In December, Congress retroactively repealed the portion of the 2017 tax law that unfairly inflicted the UBIT on tax-exempt organizations.

“Charities and houses of worship wasted precious time, money, and energy contending with a damaging tax that the 2017 Republican law imposed on them. It is unconscionable that the GOP gave big corporations and the wealthiest Americans more than $2 trillion of tax cuts, but forced soup kitchens to pay taxes on their employees' parking benefits. That policy undermined any semblance of a fair or just tax code. Congress did our part to right this wrong — now it is time for the IRS to provide tax-exempt organizations with the guidance they need to claim and receive the refunds they are due.”

Neal and Lewis also sent a letter

(https://waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/ les/documents/UBIT%20IRS%20letter.pdf) to IRS Commissioner Charles Rettig regarding the requested guidance.

While the GOP tax law included thousands of unintentional grammatical and technical errors, Republicans purposefully included the provision requiring tax-exempt organizations to pay the UBIT on employee parking and transportation benefits in their legislation.

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January 8, 2020

The Honorable Charles P. Rettig
Commissioner
Internal Revenue Service
1111 Constitution Avenue, NW
Washington, D.C. 20224

Dear Commissioner Rettig,

We write today to request that the Internal Revenue Service (IRS) establish an expedited process for tax-exempt organizations to obtain refunds of unrelated business income tax (UBIT) paid on parking and transportation benefits provided to their employees.

As you are aware, this tax was enacted in 2017 as part of the Tax Cuts and Jobs Act and was repealed in December 2019 as part of the Taxpayer Certainty and Disaster Tax Relief Act of 2019. We proudly supported repeal of this tax, which was unfair to charitable organizations and diverted money away from the good work that these organizations do.

Given that the tax was repealed retroactively, organizations that paid UBIT on parking and transportation benefits are now entitled to a refund. We respectfully request that the IRS implement an expedited process for providing refunds to these organizations, which do such critically important work for our communities. Additionally, we request that the IRS promptly issue guidance on the appropriate steps organizations should take in the refund process, so that they can receive the money they are owed without delay and further hardship.

As always, we thank you, in advance, for your prompt attention to this matter.

The Honorable Richard E. Neal, Chairman
Committee on Ways and Means

The Honorable John Lewis, Chairman
Subcommittee on Oversight