On June 28, 2019, the IRS and Treasury issued proposed regulations clarifying the application of the excise tax on certain private universities under Section 4968 of the tax code.
Very generally, Section 4968 imposes a 1.4% excise tax on the net investment income of private colleges and universities that have:
For this purpose, assets generally include assets of related organizations, unless those assets are not intended or available for the use or benefit of the college or university.
The excise tax is initially expected to apply to 25 to 30 institutions.
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