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To: Campus Unit Finance Leads
From:   Beth McAndrew, Director of Financial Reporting and Jacob Green, Financial Accountant, Financial Reporting and Management Services
CC: Manali Bettendorf, University Controller and Executive Director for Enterprise Financial Accounting

Action due by: Friday, November 5, 2021

The Financial Reporting department of the University Controller’s Office is responsible for compiling unrelated business income revenue and expenses each fiscal year for inclusion on the University’s annual Form 990-T filed with the Internal Revenue Service. This request pertains to FY2021 information, following the completion of the University’s financial statement audit.

Revenues from sales to external non-University customers may generate unrelated taxable income when the activity constitutes a regularly carried on trade or business that is not substantially related to the University’s educational mission. To determine “relatedness,” the Internal Revenue Code focuses on the nature of the activity. A university unit or department is not prohibited from engaging in activities which are determined to generate unrelated business income, but is required to report net operating results, fiscal year revenue and expenses to the Financial Reporting Department. The University policy regarding unrelated business income can be found in the Finance Division Policies and Procedures Manual, Policy 712 and more information can be found on the IRS website.

When a new activity is conducted with external non-University customers, the department conducting the activity is required to complete a separate UBI Tax Compliance Questionnaire for each activity. This questionnaire is the primary tool used by the Financial Reporting Department in determining the appropriate treatment and taxable status of the activity. If you have previously submitted a questionnaire, please only resubmit if the nature of the activity and purpose has changed. If you have no activity to report, please reply indicating you have no new activity for fiscal year 2021.

We appreciate your cooperation and partnership on this annual compliance effort. Please direct completed questionnaires, confirmations of no new fiscal year activity or questions to Jacob Green, Financial Accountant at financialreporting@unc.edu by November 5, 2021.