IRS regulations have made private business use (PBU) a concern across both public and 501(c)(3) campuses. In particular, the adoption of Schedule K reporting requirements to IRS Form 990 has emphasized the need for 501(c)(3) institutions to revisit IRS post- issuance tax compliance standards. For this reason, you need to quickly combine campus cooperation, proper documentation, and accurate calculation to ensure your institution is compliant.
Join us for a two-part online training series that will cover PBU requirements for public and 501(c)(3) institutions. Session 1, will cover appropriate steps in working with campus partners to communicate and gather PBU information. Session 2, will work more exclusively with gathered data to explore PBU calculation and remediation. Included in both sessions will be various communication steps, PBU survey samples, calculation principles and red flags, and best practices in remedial action.
Who Should Attend
All higher education administrators involved in the issuance and ongoing management of tax-exempt debt will benefit from this online training series devoted to private business use classification and calculation principles.
Session 1: Managing the Prerequisite Components of Private Business Use Calculation
After participating in this online training, you will be able to prepare campus stakeholders in gathering critical components for private business use calculation.
- Overview of Private Business Use Considerations
- What the IRS is looking for (management and service contracts, research agreements)
- Types of PBU (transfer of ownership, leasing and rental, management or service contracts, research, unrelated trade or business)
- Differentiating considerations in PBU Compliance for both 501(c)(3) and public institutions
- Generating Campus Buy-In for PBU
- Campus-wide training
- Pro-active PBU communication
- Communication and Interpretation of PBU Documents
- Sample questionnaires/surveys
- Interpreting responses
- Safe harbor exceptions (research agreements, management contracts, 50-day exclusions, unrelated business income issues, qualified building improvement exception)
- Next Steps and Key Implementation Considerations
- Concluding Thoughts and Questions
Session 2: Carrying Out Effective Private Business Use Calculation
After participating in this online training, you will be able to explore appropriate calculation principles in managing your institution’s private business use.
- Private Business Use Calculation Overview
- Square footage measurements
- Relative time and relevant revenue
- Fair market value
- Centralizing Communication Documents
- Key steps toward a centralized electronic database
- Advantages/Risks of a centralized database
- PBU Calculation Case Studies
- Discussion of poorly constructed contracts (red flags in management/research contracts, for example)
- Walk-through of building calculation that speaks to private business uses
- Remedial Action for Tax-Exempt Bond Financed Facilities
- Key requirements for remedial action
- Best practice examples in PBU remediation
- Next steps and key implementation considerations
Kelly Farmer, Tax Director, University of Minnesota
Kelly D. Farmer has served as the University of Minnesota’s tax director since 2001. From 1995 to 2001, Kelly was at Arizona State University achieving the title of senior tax manager. He started his career with the former “big eight” firm of Arthur Young & Co and later became a partner in a local CPA firm in Phoenix, AZ. Kelly is a certified public accountant and is a member of the American Institute of Certified Public Accountants.
Kelly specializes in higher education and exempt organization tax issues and is an instructor at numerous national seminars each year. He has also represented the higher education sector in hearings with the Internal Revenue Service regarding tax regulatory matters. Kelly served on the NACUBO Tax Council for eleven years through 2007 and as chair of the Tax Council for 2004 – 2005.
Stephen Weyl, Partner, Hinckley Allen Public Finance Group
Stephen Weyl serves as the head of Hinckley Allen’s Public Finance Group. Steve also has a national practice in tax-exempt financing transactions, serving as counsel to borrowers, investment bankers, credit facility providers, bond funds, and corporate trustees. He assists his clients in all aspects of public finance, including federal and state tax issues, securities matters, and derivative transactions. His borrower clients include colleges and universities, private schools, hospitals, health systems, nursing care and senior living facilities, student loan programs, social service agencies, and cultural institutions.
Steve is a frequent lecturer and author on public finance topics. He is deeply involved with the National Association of Bond Lawyers, serving as a steering committee member, panel chair and panelist at the group’s annual Bond Attorneys Workshop and its Fundamentals of Municipal Bond Law seminar, speaking on tax, securities law and interest rate swap issues. He has written numerous articles on public finance matters, including the NACUA treatise Tax-Exempt Bonds: Considerations for College and University In-House Counsel.