IRS Seeks CU Contact on Revocations Posted by Association of Vermont Credit Unions on 11:41 AM

In a recent communication the IRS advises all state-chartered credit unions who have received IRS letters claiming their tax exemption has been revoked to contact the agency and/or apply for reinstatement of their tax-exempt status, depending on their situations. The IRS posted the guidance to its website and recommends that credit unions "explain the situation and provide the information required to update IRS records." State-chartered credit unions whose tax status has been actually revoked because they failed to file the required Form 990 for three consecutive tax years must apply for reinstatement, the IRS added. A list of credit unions that have received automatic revocation letters is also provided on the Web page.

CUNA General Counsel Eric Richard says the IRS action fails to address federal credit unions who have received revocation letters or been placed on the list because they file Form 990-T to claim the health insurance premium tax credit. Federal credit unions that wish to claim health insurance premium tax credits are required to file Form 990-T. The filing apparently triggers a search by the IRS computer for past Form 990 filings, which federal credit unions are not required to file.

To our knowledge, in Vermont one federally chartered credit union received such a revocation letter.

CUNA continues to work on this issue, and earlier this year urged the IRS to address this issue as soon as possible. The 2012 deadline for Form 990-T filings was on May 15th. Read more on the IRS Web site.