Last week, the
National Council of Nonprofits
comprehensive and compelling letter
to the U.S. Department of Treasury and the Internal Revenue Service requesting delay of the implementation of two new taxes on nonprofits from the Tax Cuts and Jobs Act. The
Nonprofit Association of Oregon
agrees with the dozens of challenges and questions identified in the letter and joins the Council of Nonprofits in demanding that the IRS delay implementation of the new unrelated business income tax provisions in Section 512(a)(6) and 512(a)(7) of the Internal Revenue Code until one year after the IRS promulgates final regulations on these new laws. Section 512(a)(7) imposes a new, counter-intuitive tax on nonprofits' transportation and parking expenses. Section 512(a)(6) requires nonprofits with business income to pay the tax on each separate "trade or business" and prohibits the blending of profits and losses across lines of business. Both changes took effect on January 1, 2018 and both are causing significant confusion for many nonprofits because their applicability is unclear without further guidance from the IRS.