University Accountability Act

Summary

Imposes civil-rights penalties and new IRS reporting and review requirements on certain tax-exempt colleges and universities after a federal court finds a Title VI violation. Penalties are either $100,000 or (for institutions that file Form 990) 5% of annual administrative compensation per judgment, payable when the judgment is entered, with refunds if the judgment is later reversed. Also requires affected institutions to report each Title VI judgment and any reversal on their annual tax return and directs the IRS to review tax-exempt status after more than two such judicial findings, potentially leading to revocation of tax-exempt status for repeat violators. Time limits on assessment and refund do not apply to these penalties.

• Creates a new tax-code penalty triggered by federal court findings of Title VI violations against certain tax-exempt schools.
• Penalty equals the greater of $100,000 or 5% of aggregate administrative compensation for institutions that file annual information returns.
• Penalties are due when the federal judgment is entered; refunds are required if the judgment is reversed or vacated.
• Institutions that file Form 990 must disclose each Title VI judgment and any reversals on their annual return for post-enactment determinations.
• The IRS must review tax-exempt status after more than two post-enactment Title VI judgments, enabling potential revocation for repeat violators.
• Normal statute-of-limitations rules for assessment and refund do not apply to these civil-rights penalties and refunds.
• Targets tax-exempt colleges, universities, and similar eligible educational institutions described in the tax code.
• Does not create new spending programs or emergency funding; it modifies tax liabilities and reporting obligations.
• Liability is tied to judicial findings, limiting penalties to cases that resulted in federal court judgments (not merely complaints or administrative findings).