University Accountability Act

HR 2686, the University Accountability Act, imposes financial penalties on tax-exempt universities found to have violated civil rights laws. Specifically, it requires a penalty of $100,000 or 5% of the institution’s administrative compensation (whichever is greater) for each federal court ruling finding a violation of Title VI of the Civil Rights Act. Universities must report all such violations on their annual tax returns, including details about the violation and prior determinations. Additionally, a university facing a third or subsequent violation must undergo a mandatory review of its tax-exempt status by the IRS. This bill directly affects tax-exempt educational institutions subject to IRS reporting requirements under Section 501(c).