By Elaine and Frank Sommerville
A new definition of unrelated business income created through the Tax Cuts and Jobs Act of 2017 has the nonprofit community, including the church community, buzzing with a mixture of rumors and facts regarding potential new tax liabilities and filing responsibilities. While there are differing opinions on the matter, we believe many churches are not affected by this provision when it comes to the parking they provide to employees.
Everyone agrees that the IRS must provide guidance on the provision or delay implementation of the provision until after guidance can be issued. However, churches cannot wait to see what the IRS will do. Absent IRS action, what action should churches take? All churches should review the commuting and parking-related benefits they provide to employees.
If the church has free parking and is surrounded by free parking, then it provides no qualified transportation fringe benefit program related to parking. If a qualified transportation fringe benefit is not provided through free parking, then the new law does not apply to the parking.
Churches in urban areas requiring transportation fringe benefits and those in downtown areas or near attractions will be the ones most affected by the new laws.
Many groups have requested the IRS to provide guidance, and others have requested Congress either to totally remove the provision or to clarify it. Until one of these bodies acts, churches must comply with the law for all related expenses incurred or paid after December 31, 2017, and take appropriate action to comply with reporting requirements.
For a detailed explanation of the new law visit Church Law & Tax.
Source: Christianity Today
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