Its finally over. On December 20, 2019 President Trump signed the SECURE Act, which repeals the dreaded parking tax applied to exempt organizations under tax reform.
As described in our prior LEGALcurrents, under the Tax Cuts and Jobs Act of 2017, nonprofits making certain fringe benefits available to their employees were required to pay tax on those benefits as if they were unrelated business income. Congress was trying to even the playing field between exempt organizations and non-exempt organizations, which could no longer deduct the tax. However, its approach sparked an uproar, including, amusingly, a Twitter account dedicated to banning the parking tax. Preliminary guidance explaining how the tax would work spanned 24 pages.
The repeal is retroactive. Accordingly, nonprofits that have paid the tax in the past will need to amend their returns in order to obtain a refund. The IRS has issued a form that non-profits can use to claim the refund.
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