Stanford University is aware of the privileges and responsibilities conferred upon it through its federal and state income tax exemptions, its county property tax exemption and its ability to secure tax-exempt debt through the State of California. Stanford's joint mission of instruction and research is strongly influenced by the support and confidence of taxpayers in general and by the university's supporters. To this end, Stanford establishes high standards of compliance with respect to applicable tax regulations as outlined on this page.
Stanford's Tax Exempt Status
Stanford University is exempt from federal income tax as an educational institution under section 501(c)(3) of the Internal Revenue Code, and from California state income tax as an educational institution under the Revenue and Taxation Code (R&TC) Section 23701d. Refer to affirmation letters below:
- Affirmation letter from the IRS confirming the Stanford University's 501(c)(3) status
- Affirmation letter from California Franchise Tax Board confirming the university's (R&TC) Section 23701d status
Stanford's Annual Tax Filing Requirements
On an annual basis, the Financial Management Services (FMS) Financial Compliance & Operations Tax Department prepares and files with the appropriate governing agencies:
- Federal Form 990, Return of Organization Exempt from Income Tax
- Franchise Tax Board Form 199, California Exempt Organization Annual Information Statement or Return
- Federal Form 990-T, Exempt Organization Business Income Tax Return
- Franchise Tax Board Form 109, California Exempt Organization Business Income Tax Return
Information for Public Inspection
University Compliance Policy and Standards
The university is committed to complying, in all respects, with the Internal Revenue Code, Regulations, Authoritative Pronouncements and Rulings by the Internal Revenue Service and similar state and local laws and regulations. Tax compliance is the responsibility of every university employee whose efforts may affect such compliance. The university shall cooperate with agents of appropriate authorities in inquiries and audits. The university's cooperation with and responses to such agencies shall be coordinated by the FMS Tax Department or other assigned university units to facilitate timely, accurate and complete responses. All employees are to be truthful in their dealings with taxing authorities. It is incumbent upon university managers to assure that employees are properly trained and supervised in any activities that may impact university tax compliance.
Responsibility for Tax Compliance
The FMS Financial Compliance & Operations Tax Department is responsible for university tax compliance, which is one of the areas under the Institutional Compliance Program at Stanford. The Director of Internal Audit and Institutional Compliance has oversight responsibilities for the Institutional Compliance Program. The FMS Tax Department is the operating unit charged with continuously monitoring and complying with tax laws and regulations.
The FMS Tax Director partners with the professionals in the General Counsel's Office, the Internal Audit Department, a network of professional tax experts and the various individuals and operating units throughout the university that are charged with tax compliance responsibilities.
School and Regional Involvement
Tax compliance is an important university responsibility. Accordingly, budget units should establish appropriate budgets to fund necessary compliance and control functions and training. Budgets should also allow for external professional advice where the need extends beyond the support available from the FMS Tax Department and other university units.
Each School or Regional Unit shall appoint a Regional Tax Compliance Officer (RTCO). This person will:
- Have an intimate understanding of the activities of his or her business unit
- Assist others in that unit with tax questions to the extent possible
- Where appropriate, refer questions to FMS Financial Compliance & Operations
- Disseminate necessary information on new tax rules
- Provide information to FMS Financial Compliance & Operations on any new activities of the unit that may need to be examined for tax compliance purposes. Each RTCO will receive initial training from FMS Financial Compliance & Operations and then meet with him or her on a periodic basis.
Enforcement and Corrective Action
Where applicable, tax compliance efforts should be an aspect in an individual's job performance, evaluation. Managers should provide the necessary training to those individuals charged with tax compliance responsibilities. Managers are responsible for ensuring tax compliance and helping to identify areas for remediation, where improvement is warranted. If areas of tax compliance are of particular concern, managers should work with the FMS Tax Director on a plan of remediation, including a time frame for reevaluation. Deliberate noncompliance with tax laws may be considered a cause for immediate termination.
Anonymous Reporting of Non-Compliance
Employees who believe there may be deviations from tax compliance procedures are encouraged to report such concerns to their immediate supervisors. If the employee determines, for whatever reason, that such reporting is not feasible, the employee may anonymously report his/her concerns to any of the following individuals: FMS Tax Director, Regional Tax Compliance Officer, Director of Internal Audit and Institutional Compliance, University General Counsel, Cognizant Associate Dean or Director. To the extent possible, the reporting employee's identity will be held confidential. Consistent with university policy, an employee making such claims will not be subject to retaliation.
University Management and Board Level Oversight
The FMS Tax Director will periodically update senior university management on the status of tax compliance for the university. The FMS Tax Director will coordinate a cycle of periodic reviews of various areas of compliance, seeking to partner with external professionals, Internal Audit staff and external compliance officials in identifying areas where compliance may be improved.
The Senior Director of Compliance and Operations and the Vice President for Business Affairs and Chief Financial Officer will report to the Audit and Compliance Committee of the Board of Trustees from time to time on tax compliance matters.