UTS103 - Attachment A
NON-FINANCIAL QUESTIONNAIRE
GENERAL INSTRUCTIONS
PURPOSE
The purpose of this questionnaire is to assist institutions in evaluating activities potentially unrelated to the exempt purposes of The University of Texas System (the "University”).
BACKGROUND
The University must file Form 990-T if it has gross income from an unrelated trade or business of $1,000 or more.
In order for an activity to be subject to the unrelated business income tax it must meet the following criteria: (1) it must be a "trade or business,"(2) it must be regularly carried on, and (3) it must not be substantially related to the organization's exempt purpose (aside from the need of the organization for funds). When an activity meets all three criteria, several exceptions found in the Internal Revenue Code must be reviewed to determine whether the activity may be excluded from the 990-T. The Non-Financial Questionnaire provides the basis for establishing the tax status of an activity.
The Institutional Tax Coordinator, with assistance from all departmental personnel with relevant knowledge concerning an activity, must complete a questionnaire when:
- A new activity is initiated during the current fiscal year with a potential for generating unrelated business income.
- An activity reviewed in a prior reporting year has changed its mode or scope of operations during the most recent year, and
- Highly visible activities are under way, i.e., advertising, facilities usage, joint ventures, etc., which are similar to those already determined to be unrelated at other campuses or universities.
It is important to include all sources of potentially "unrelated" income, regardless of whether a profit or loss results. Losses from an unrelated activity may be used to offset income elsewhere.
A Non-financial Questionnaire need not be completed for any of the unrelated business activities reported previously. These activities will automatically be considered unrelated unless their mode or scope of operations has changed in the reporting year to the extent that the activity should now be considered related to the University’s exempt purpose. In that case, anew questionnaire must be completed for the activity. Conversely, a new questionnaire need not be completed for any activity reviewed previously and determined to be related to the University’s exempt purpose unless the activity has changed its mode or scope of operations.
DUE DATES
The following materials should be returned to the Office of General Counsel with a copy to the Office of the Controllerby August 31st:
- Completed Non-financial Questionnaires (note: each section of the questionnaire must be completed), and
- A transmittal letter listing all new unrelated business activities conducted by the institution during the year then ended, and all unrelated activities from the previous year.
Please provide as much relevant information as possible in response to each question in order to assist in the determination of whether or not an activity is reportable or exempt. Attach additional sheets if necessary.
The following materials should be returned to the Office of the Controllerby November 15th:
1.Financial Worksheets identifying the revenue and expense for each unrelated activity.
REVIEW BY SYSTEM ADMINISTRATION
All questionnaires and reportable/exempt recommendations made by the institutions will be reviewed by the Office of General Counsel in consultation with the Office of the Controller. For each activity deemed to be reportable, the Office of the Controller will subsequently request the institutions to complete Financial Worksheets identifying the revenue and expense for the year. These worksheets will then be used by the Office of the Controller to prepare the University's consolidated 990-T tax return.