In May 2010, the IRS released an interim report on the Colleges and Universities Compliance Project, a product of the October 2008 compliance questionnaire sent to approximately 400 colleges and universities. The questionnaire requested details (beyond the level reported on the IRS Form 990) about executive compensation, endowment funds, unrelated business taxable income, and controlled organizations. Based on the responses to the questionnaire, the IRS has initiated selective audits of more than 30 college and universities.
The interim report features preliminary information on the respondents' organizational structures, demographics, exempt and unrelated business activities, endowments, executive compensation, and governance practices. The IRS concluded in its report that some answers to the questionnaire show potentially conflicting responses. For example, many schools reported controlling entities, engaging in rental activities, and receiving corporate sponsorships, yet few reported such activities on the Form 990-T (used to report unrelated business taxable income). The IRS anticipates issuing a final report that will include information obtained from both the audits and further analysis of the responses to the questionnaire. In addition, the IRS has stated that it expects that “the information learned from the questionnaire responses and examinations will identify issues and areas that warrant additional guidance and further scrutiny.”