AICPA seeks IRS guidance on excise tax

The AICPA is urging the Treasury Department and the IRS to provide transition relief and comprehensive guidance regarding Section 4960 of the tax code, amended last year by the One Big Beautiful Bill Act, that imposes an excise tax on applicable tax-exempt organizations.

“Given the scope and magnitude of the changes made by the OBBBA to Section 4960, we recognize and appreciate the need for comprehensive guidance. However, we respectfully urge Treasury and the IRS to prioritize the issuance of transition relief to address several immediate issues that could disrupt the operations of tax-exempt organizations,” Cheri Freeh, chair of the AICPA Tax Executive Committee, wrote in a letter to the IRS and Treasury.

“Absent timely transition relief, these issues may result in significant and unintended financial exposure for tax-exempt organizations and related entities subject to the section 4960 excise tax,” Freeh added.

The AICPA’s letter offers several recommendations on issues emerging from the OBBBA’s revisions to Section 4960.