The Catholic University of America

Responsibilities of the Senior Director, Accounting and Financial Reporting

The Senior Director, Accounting and Financial Reporting, is responsible for compliance with the following regulations:

Exempt Organization Tax Returns

As a tax exempt organization under 26 USC §501(c)(3) the University must file an annual return (Form 990) by the 15th day of the 5th full month after the annual accounting period.  The Form 990 must state the items of gross income, expenses, disbursements, balance sheet, total gifts and contributions, and other information prescribed by the Secretary of the Treasurer.  As part of the Form 990 process the University must report foreign bank and financial account information by July 2nd, and must state whether it has policies regarding conflicts of interest, whistleblowing, record retention and joint ventures. The University must make available for public inspection for the previous 3 years its Forms 990 (and Forms 990-T for 3 years after filing for those filed after 8/17/06) with all schedules, attachments and supporting documentation.  Web posting satisfies the requirement.

Unrelated Business Income Taxes (UBIT)

Income on activities in a trade or business regularly carried on but unrelated to the University’s exempt educational mission, such as advertising, is taxable. Such activities are classified as a "related" or "unrelated" according to the larger group of activities to which they pertain, and not whether the activity results in a profit.  The University must file a return on Form 990–T when gross income from unrelated trade/ business is $1,000 or more.  This may require estimated tax payments.  Also, the University may have signed exclusive rights agreements to distribute a product on campus that the Internal Revenue Service has deemed to cause UBIT.

Sales Tax Remittance

The University’s exemption from payment of sales tax does not extend to resale groups or individuals such as employees or students.  Accordingly, unless related to the University’s core educational mission or otherwise exempt, the University must collect, report and remit to DC tax on sales of tangible goods and covered services.  The Senior Director, Accounting and Financial Reporting, is responsible for remittance of tax collected.

Non-Resident Alien Taxes, Filing and Information Returns

Payments to employees and non-employees who are non-resident aliens and who have claimed exemption from federal taxes due to tax treaties entered into between the U.S. and foreign countries must be filed with the Internal Revenue Service by March 15th annually.  The taxable portion of payments to non-resident aliens who are employees are reported on a Form W-2.  Income received by non-resident aliens is subject to differing withholdings based upon the source of the income.  Proper reporting for payments and withholdings is achieved by using Forms W-4, 1042, 1042-S, and 8233, as appropriate.

Foreign Accounts Tax Compliance Act (“FATCA”)

Enacted in March 2010 as Subtitle A of Title V of the Hiring Incentives to Restore Employment (“HIRE”) Act, FATCA amends the Internal Revenue Code by imposing a 30% withholding tax on certain U.S. source payments made to “foreign financial institutions” (“FFIs”) and “non-financial foreign entities” (“NFFEs”) that refuse to identify certain U.S. investors, even if such U.S. persons directly or indirectly hold only non-U.S. assets.  The FATCA withholding tax applies to payments of both U.S. source income and gross proceeds from the sales of securities that could pay U.S. source interest and dividends.  The Act is effective for payments made on or after January 1, 2013.

Bank Secrecy Act of 1970, Foreign Bank Account Reporting (FBAR)

Annually, the University must file FinCEN Form 114, the Report of Foreign Bank and Financial Accounts, if at any point during the year it had an ownership interest or signatory authority over a financial account in a foreign country with an aggregate value in excess of $10,000.  "Signatory authority" means the ability to control disposition of the assets.  "Financial account" includes an insurance policy with a cash value or an annuity policy. Individuals with signature or verbal authority also have a reporting duty. 

Imputed Interest on Employee Loans

Imputed interest on employee loans must be determined in accordance with IRS regulations and reported on Form 1098.

Resources

IRS - Tax Information for Charities and Other Non-Profits

Office of General Counsel, Summary of Federal Tax Laws

Payments to Foreign Nationals

Related Policies

Employee Loan Policy

Honoraria Policy

Non-Resident Alien Payments Policy

Revenue Recognition Policy

Student Organization Tax Identification Policy

Tax Compliance Policy