Tax Exempt Organizations Urge Closure On Corporate Sponsorship Rules.
Tax Exempt Organizations Urge Closure On Corporate Sponsorship Rules.
- Institutional AuthorsTax Exempt Organizations Group
- Subject Area/Tax Topics
- Index Termsunrelated business income
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 95-2213
- Tax Analysts Electronic Citation95 TNT 36-18
Eighteen members of the Tax Exempt Organizations Group, representing the interests of the arts, athletics, and the mass media, have urged Treasury to include completion of the corporate sponsorship regulations in the 1995 business plan.
With the exception of the proposed "tainting rule," the signatories say, "[T]he regulations are close to final form." But they take issue with the tainting rule, finding that "[I]t is unacceptable in that it threatens to subject to the unrelated business income tax (UBIT) all sponsorship revenue, even if only an incidental, inconsequential sponsorship activity is deemed to constitute advertising." Such a rule, they assert, even conflicts with the UBIT itself, as it applies in other contexts.
The signatories urge closure on this issue. "Without final guidance," they say, "the community will continue to labor with a cloud over its fundraising efforts, and its ability to plan for past and future income tax liabilities."
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January 19, 1995
The Honorable Leslie B. Samuels
Assistant Secretary for Tax Policy
Department of the Treasury
1500 Pennsylvania Avenue, N.W.
Washington,D.C. 20220
Dear Assistant Secretary Samuels:
We are aware that your office is participating in the preparation of the Department of Treasury/Internal Revenue Service 1995 business plan. For the reasons explained below, we urge you to include completion of the corporate sponsorship regulations in the 1995 business plan.
The signatories below represent a diverse group of tax exempt organizations, from small, one-day-a-year community festivals to some of the largest tax exempt organizations in the country. In addition, the undersigned organizations are involved with the arts, medical research, sports, social welfare organizations and other exempt purpose functions. Each of us has encouraged Treasury and IRS to conclude work on the corporate sponsorship issue, and this past summer we met as a group with Treasury and IRS officials to present our collective views on the matter.
With the exception of the "tainting" rule in the proposed corporate sponsorship regulations, we believe that the regulations are close to final form. The tainting rule is unacceptable in that it threatens to subject to the unrelated business income tax ("UBIT") all sponsorship revenue, even if only an incidental, inconsequential sponsorship activity is deemed to constitute advertising. Such a rule is inconsistent with UBIT as it is applied in other contexts.
Members of the exempt organization community have been working with Treasury and IRS on corporate sponsorship for as long as ten years. Without final guidance on this issue, the community will continue to labor with a cloud over its fundraising efforts, and its ability to plan for past and future income tax liabilities. For these reasons, it is critically important to the exempt organization community for Treasury and IRS to come to closure on corporate sponsorship. Therefore, we urge you to include finalization of the corporate sponsorship regulations in the Treasury and IRS 1995 business plan.
Sincerely,
America's Public Television Independent Sector
Stations
American Arts Alliance International Festivals
Association
American Heart Association National Collegiate Athletic
Association
American Symphony Orchestra National Multiple Sclerosis
League Society
Association of Art Museum OPERA America
Directors
Association of Performing Arts PGA Tour, Inc.
Presenters
Breeders' Cup Limited Theatre Communications Group
Dance/USA United States Olympic Committee
Football Bowl Association YMCA of the USA
cc: Commissioner Margaret Milner Richardson
Chief Counsel Stuart L. Brown
Mr. James J. McGovern
Mr. Marcus S. Owens
Ms. C. Elizabeth Wagner
Mr. Floyd L. Williams III
- Institutional AuthorsTax Exempt Organizations Group
- Subject Area/Tax Topics
- Index Termsunrelated business income
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 95-2213
- Tax Analysts Electronic Citation95 TNT 36-18