Internal Revenue Code (IRC) Section 512(a)(7) was recently retroactively repealed by the Taxpayer Certainty and Disaster Tax Relief Act of 2019. Section 512(a)(7) increased unrelated business taxable income by amounts paid or incurred for qualified transportation fringes, and Congress originally enacted this provision for amounts paid or incurred after December 31, 2017.

A person typing on an Apple Mac laptop; image used for blog post about claiming a refund for UBIT or adjusting Form 990-T

As a result of the retroactive repeal, you may wish to claim a refund or credit for taxes previously paid on qualified transportation fringe amounts on your 2017 or 2018 Form 990-T.  On January 21, 2020, the IRS posted how to claim a refund or credit, which includes filing an amended Form 990-T as well as the following steps:

  1. Write “Amended Return” at the top of Form 990-T.
  2. Complete the Form 990-T as it was originally done but adjusting the original entry for the disallowed fringes. See the different specifications for a 2017 versus a 2018 Form 990-T on the IRS website.
  3. Attach a statement indicating the line numbers on the original return that were changed and the reason for each change.

For the full details on the instructions, visit www.irs.gov.

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