January 13, 2010, Cambridge, Mass., WebCPA.com — The Internal Revenue Service plans to audit Harvard University and about 39 other colleges as part of an overall review of tax-exempt nonprofit organizations.
The IRS sent compliance questionnaires in October 2008 to approximately 400 colleges and universities asking about their business income, endowments and executive compensation practices (see IRS to Question Colleges on Income and Endowments). The IRS said it wanted to gather information from the schools about how they report revenues and expenses from their trade or business activities, classify their activities as exempt or taxable, and calculate and report income or losses on taxable activities.
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