Additional relief, in the form of a waiver of penalties on underpayment of estimated taxes due on Form 990-T, has been given to certain tax-exempt organizations for 2018 in Notice 2018-100.  The guidance was issued on the same day as Notice 2018-99 which provided guidance on computing the amount of employee parking benefit that is to be treated as UBTI by the exempt organization.

In Notice 2018-67 the IRS has provided rules to deal with separate trade or business issues for Unrelated Business Income found in IRC §512(a)(6) as added by the Tax Cuts and Jobs Act.

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In the arena of tax law, often minor differences in a situation may create major differences in how a situation is evaluated for tax purposes.  What a taxpayer must show to demonstrate an activity was entered into with an intention to make a profit is one of those areas where there are different tests depending on the situation.

Specifically, a not for profit organization seeking to offset unrelated business taxable income from one activity with losses from another unrelated business activity faces a very different hurdle to show that the second activity was entered into with the intent to make a profit.  This issue was discussed recently in the case of Losantiville Country Club v. Commissioner, TC Memo 2017-158.

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