IRS Telling Some CUs They Aren’t Tax Exempt
Some state-chartered credit unions have been told by the Internal Revenue Service that they are no longer tax exempt because the IRS hadn’t received their 990 forms.
Feb. 8, 2012: IRS Reverses Course, Cites Record-Keeping Error
The IRS included several dozen credit unions on its list of organizations that would lose their tax-exempt status because the agency hadn’t received the forms. State regulators used to file these forms in a group on behalf of state-chartered credit unions but stopped providing this service.
According to the Texas Credit Union League and NAFCU, in some instances the IRS has also questioned why some federal credit unions haven’t filed a Form 990, even though federal credit unions are exempt from this requirement.
The IRS also questioned why federal or state credit unions have failed to apply to the IRS for tax-exempt status, even though credit unions are automatically tax exempt and don’t have to apply for it.