Proposed Regulations on Corporate Sponsorship Arrangements and Offsetting Expenses to Avoid Unrelated Business Income Tax By Tax-Exempt Organizations
On March 1, 2000, the Internal Revenue Service published proposed regulations on the tax treatment of corporate sponsorship payments to exempt organizations. The proposed regulations implement section 513(i) of the Internal Revenue Code of 1986, which provides that “qualified sponsorship payments” will not be subject to the unrelated business income tax (UBIT).