Date: March 15, 1996 Code: AD 96-08
To: Vice Presidents for Administration
From: George A. Pardon Accounting Director Business and Finance
Subject: Unrelated Business Income Information Package and Worksheets
Preparing for the first filing of the income tax return for the CSU will be an additional workload for campuses requiring a significant amount of reading to comprehend the issues and analysis of existing campus operations. Once the return has been filed for fiscal year 1995/6, it is highly likely that it will be audited. Thus, it is critical that each campus is committed to submitting information that is accurate, timely and consistent with the Internal Revenue Code.
The following information highlights important steps in the process of preparing the tax return as well as identifying critical campus deadlines.
- Tax Coordinator Worksheet DUE: April 1, 1996
This form will identify the campus personnel responsible for coordinating the campus tax reporting process. Requests for additional information and clarifications will be sent directly to this person.
- Revenue Analysis Questionnaire/Summary Report DUE: May 31, 1996
All campus revenues should be reviewed to determine if they are taxable. A questionnaire should be prepared for all revenues that are not clearly exempt from taxes. The questionnaire will assist the campus in determining and documenting the tax status of each revenue source. The Revenue Analysis Summary Report should include all activities determined to be taxable by the campus and submitted to the Chancellor's Office.
- Unrelated Business Income Tax Worksheet DUE: September 30, 1996
This worksheet will be prepared for each taxable revenue identified by the campus Revenue Analysis Questionnaire. This worksheet documents the amount of revenues and any allowable deductions and provides an audit trail to the Financial Records System. This worksheet will follow the basic format of the federal form 990-T (see Section II B). Copies of the worksheet and instructions will be sent to the campuses once the Revenue Analysis Summary Reports have been reviewed by the Chancellor's Office.
Once the tax liability has been calculated, the Chancellor's Office will send a tax bill to the campuses. These assessments will be based on each campus' net taxable income. Campuses must remit taxes due immediately upon receipt of their bill. These funds must be received in time for the finalized return to be postmarked before the November 15, 1996 due date.
The attached informational package provides detailed information about the process through the May 31 due date. Based on the information provided in the package, campuses should begin identifying the mechanism for collecting the data due September 30 for inclusion in the tax return.
If you have any questions, please contact Mr. Bill Musselman at (310) 951-4610 or E-Mail at firstname.lastname@example.org.GAP:WPM:js AD 96-08
Distribution: (w/ Att.) Presidents Financial Managers Accounting Officers Mr. Richard Ludmerer, General Counsel Mr. Bill Musselman, Cash and Asset Manager Mr. Richard P. West, Vice Chancellor - Business and Finance