How to Claim Your UBIT Parking Tax Refund

As a follow-up regarding the blog we posted about the repeal of the tax code provision that taxed exempt organizations for the allocation of certain disallowed fringe benefits (including parking), we would like to update you regarding the process for claiming a refund or credit of your Section 512(a)(7) related Unrelated Business Income Tax (UBIT) now no longer owed. Per the IRS website posting of January 21, 2020, this is the process to be followed:

1. To obtain your refund, you will need to file an amended Form 990-T.
2. If you are amending only due to the repeal of Section 512(a)(7), write “Amended Return – Section 512(a)(7) Repeal” at the top of Form 990-T.
3. Complete the Form 990-T as you originally did other than adjustments for the disallowed fringe benefits entry set forth below.
4. For 2017 Form 990-T, you will:
-Reduce the entry on the line on which you originally included the 512(a)(7) amount by that amount. Per IRS guidance, this would have been on line 12 (other income).
-Complete the rest of the Form 990-T after consideration of that revised entry.
-Include on the “Other” sub-line of line 45g (other credits and payments) the amount of tax from line 48 (tax due) of the original return (if any).
-If your changes result in the organization having made an overpayment, you should enter that amount on line 49 (overpayment) line of the amended return, -which you may request as a refund or credit on line 50.
5. For 2018 Form 990-T, you will:
-Enter “0” (zero) on line 34 (amounts paid for disallowed fringes).
-Complete the rest of the Form 990-T after consideration of that revised entry.
-Include on the “other” sub-line of line 50g (other credits, adjustments, and payments) the amount of tax from line 53 (tax due) of the original return (if any).
-If your changes result in the organization having made an overpayment, you should enter that amount on line 54 (overpayment) line of the amended return, which you may request as a refund or credit on line 55.
-For each amended filing, attach a statement indicating the line numbers on the original return that were changed and the reason for each change (for example, stating “repeal of Section 512(a)(7)”).

There is no rush to file these amended returns. The time limits for filing refund claims found in IRC Section 6511 apply to these refund claims. Typically, these time limits are three years from the date the original Form 990-T was filed or two years from the time the tax was paid, whichever is later.