RALEIGH, N.C. — UNC-Chapel Hill and UNC-Charlotte are among the
targets of audits planned by the Internal Revenue Service in a
crackdown that already has found multi-million-dollar tax violations on
college campuses across the nation.
The IRS is expected to take at least two years poring over the
financial books of the two schools and of UNC Hospitals on the Chapel
Hill campus.
“I’d rather have a tooth pulled than to have the IRS on campus,”
said UNC-Charlotte Chancellor James Woodward. “It’s going to take so
much of our time and energy to respond.”
The IRS requested thousands of records on students, employees and
every dollar coming in and out of UNC Hospitals and the two schools
from 1993 to 1995, The News & Observer of Raleigh reported.
The IRS began audits of large, tax-exempt organizations in the
early 1990s in response to a restructuring of the health-care industry
that often blurred tax-exempt and for-profit interests.
The audits quickly spread to universities, whose activities can be similarly murky.
“We are not necessarily looking into anything untoward,” said
Marcus Owens, director of the Exempt Organizations Technical Division
of the IRS. “The IRS wants to ensure charitable money stays in a
charitable stream and to make sure income tax is appropriately reported
and paid.”
Owens said the agency has finished eleven such audits of
universities, leaving an average bill of $5.2 million. The bill is
generally negotiated down to an average of $1 million.
The IRS won’t comment on specific audits or acknowledge that they’re going.
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