IRS Provides New Information for Credit Unions Facing Automatic Revocation of Exemption

The IRS has provided new information for federal and state credit unions that have had either their own tax-exempt status revoked automatically for failure to file annual returns for three years or have received a notification that their parent organization has been subject to such revocation.  The new information addresses three common situations:

• When a federal credit union has had its tax-exempt status revoked even though it is not required to file an annual return (letter to IRS asserting federal credit union status required).

• When a state credit union, which is required to file an annual return, has had its tax-exempt status revoked (application for reinstatement of tax-exempt status required if the credit union was required but failed to file annual returns for three consecutive years).

• When a credit union has been notified that its parent organization has lost its tax-exempt status (noting a situation that has arisen because some state agencies that had previously filed group information returns on behalf of all exempt state-chartered credit unions under their control and supervision have ceased to do so).

LHM