Tax Status of the University
Scope- This guideline is designed to answer questions about the University's tax status.
Tax-Exempt Status- The University is tax-exempt under section 115 of the Internal Revenue Code and/or under the doctrine of intergovernmental tax immunity. Section 115 provides tax-exemption for "income derived from the exercise of any essential governmental function." In Revenue Ruling 75-436, the Internal Revenue Service recognized that citizen education was an essential governmental function.
Contributions to the University - For income tax purposes, section 170 provides that donations made for exclusively public purposes, to or for the use of a state or political subdivision, are deductible against the taxable income of individuals, corporations, and other taxpayers, subject to various limitations. For estate tax purposes, section 2055(a) provides that bequests, legacies, devises, or transfers made by an estate for exclusively public purposes, to or for the use of any state or political subdivision, are deductible from the value of the gross estate subject to various limitations. For gift tax purposes, section 2522(a) provides that transfers made for exclusively public purposes, to or for the use of any state or political subdivision, are deductible in computing taxable gifts subject to various limitations. The Internal Revenue Service has ruled (Private Letter Rulings 8336068, 8935012, and 9017014) that contributions to state universities qualify as being made for "exclusively public purposes" and "to or for the use of" a state. Although private letter rulings cannot be relied upon as legal precedent, they give a good indication of how the IRS would rule on a similar fact pattern. If donors prefer to contribute to a tax-exempt organization with an IRS determination letter and with section 501(c)(3) tax-exempt status, they should contribute to the University of Massachusetts Foundation, Inc.
Federal Tax Identification Numbers - The University's federal tax identification number is 04-3167352. The Commonwealth of Massachusetts' tax identification number is 04-6002284. The Commonwealth's number is used for payroll tax purposes.
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