IRS Admits Error on CUs' Tax-Exempt Status
The Internal Revenue Service has blamed a record-keeping error on its part for mistakenly informing several dozen state-chartered credit unions that they were no longer tax exempt.
“You received the letter containing the erroneous information because of the way state credit unions that filed group returns were maintained on our systems. If you continue to meet your annual filing requirements, you may hold yourself out as tax exempt as long as you meet all other applicable requirements for tax exemption under the Internal Revenue Code,’’ the Internal Revenue Service wrote in a letter to those credit unions that was received in the past several days.
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 their 990 forms. State regulators used to file these forms on behalf of state-charted credit unions but stopped providing this service.
Executives of CUNA and NAFCU said last year, when the IRS originally sent the letters, that it was a mistake and that most of the credit unions had filed their 990 forms as required.