IRS Issues Proposed Rules On UBTI Calculation for Exempt Organizations

The Internal Revenue Service issued proposed regulations on how certain exempt organizations providing employee benefits should calculate their unrelated business taxable income.

The guidance (REG-143874-10), released Feb. 5, replaces proposed rules issued on UBTI calculation that were issued Feb. 4, 1986, and include some changes “to improve clarity and respond to comments received on the 1986 Proposed Regulation, but otherwise generally [have] the same effect.”

The new proposed rule retains the UBTI calculation formula from the 1986 guidance, but “modifies and clarifies the description and adds examples,” the IRS said.

Under the formula, the IRS said, the UBTI ...