From NYTimes.com:
The Internal Revenue Service is considering expanding its scrutiny of colleges and universities to focus on billions of dollars associated with academic research, federal financing and intellectual property, a senior agency official said on Tuesday.
The expansion of an investigation would put pressure on the schools to further disclose their inner financial workings as the IRS undertakes a major effort to learn more about whether academic institutions are improperly using their nonprofit status to avoid paying certain taxes.
The expansion, while not yet certain, “is on the table,” Lois G. Lerner, the IRS’s director of exempt organizations, said in a brief interview.
As part of its current investigation, which began last October, the IRS sent unusually detailed questionnaires to 400 private and public universities and colleges about their executive compensation policies and their business activities.
While the institutions are not obligated to respond, not doing so can potentially lead to an audit.