Last week Sen. Charles Grassley (R-Iowa) asked officials at the Internal Revenue Service and the U.S. Treasury Department to develop a new tax form specifically for colleges and universities.
The proposal for the new form is part of a wider governmental movement, led by Grassley, to examine how universities manage their money as tuition costs continue to rise.
The current tax report - called Form 990 - is used by all tax-exempt organizations and was itself redesigned for the 2008 fiscal year.
Grassley's recently proposed form would require universities to report additional information about their student populations, finances, endowment spending and executives' compensation, said Bill Andresen, the head of Penn's office in Washington.
In response to Grassley's request, the IRS said it will send a questionnaire to 400 colleges and universities to get a better sense of their costs, endowments and sources of income.
Andresen said he is unsure if Penn will receive a questionnaire.
Because colleges and universities are nonprofit organizations, they receive government subsidies.
"It is understandable and not surprising that the IRS has an interest in what we're doing and how we're handling the money we raise," Andresen said, adding that Penn has "no problem" providing the government with additional information.
Andresen said the IRS will wait to analyze the results of the questionnaire before making any decisions about a new form.
The proposed form's critics say it is unclear what the government will gain from extra paperwork.
Tony Pals, spokesman for the National Association for Independent Colleges and Universities, said universities already provide the government with sufficient financial information.
"It's a little ironic that an unintended consequence of additional reporting requirements would be added costs incurred by institutions, which only puts further pressure on tuition increases," said Pals.
Last year, the Senate Finance Committee, led by Grassley and Sen. Max Baucus (D-Mont.) requested information from 136 colleges and universities with endowments of more than $500 million.
The senators, citing concerns over rising tuition prices, proposed legislation that would have required such universities to spend 5 percent of their endowments yearly. The legislation was later withdrawn.
But at a Congressional roundtable discussion last week on rising tuition costs, panelists objected to Congress mandating a minimum endowment payout.
"Each institution is much better equipped to make those decisions based on their individual students' needs," Andresen said.
He added that it is unlikely that Congress will pass legislation to regulate endowments this year or next year.
