IRS notice appears errant

Published by: Sean Brown

January 26, 2022 | Government Affairs

Last week, the League was made aware of a Notice going out from the IRS stating that credit unions were “no longer recognized as a tax-exempt subordinate group.” Since that time, we have worked tirelessly to find out the nexus for these notices. The League was in constant contact with the IRS, ODFI, CUNA, NASCUS, the Ohio Department of Taxation, and Congress to find you helpful information or recourse.

According to ODFI, the state has not filed a “group exemption” since roughly 2008; thus, there is no longer a “group” exemption in Ohio. Since that time, state-chartered credit unions have filed their own 990s. Based on dialogues with several impacted state-chartered credit unions and their auditors, we’ve learned that those credit unions are current on their 990 filings, and at least one credit union, who connected directly with the IRS, was able to confirm they remain tax-exempt and the letter’s origin appears to be errant. You can use this search tool to confirm your credit union’s tax-exempt status. Simply “Search By” EIN and type your credit union’s EIN in the “Search Terms” box.

While we believe the notice is simply an error, the IRS will not directly connect with the League as we are not authorized to discuss tax filings on your behalf. If you would like further confirmation the notice was indeed an error and that no further action is necessary, your credit union can do any of the following:

  1. Confirm your credit union’s tax-exempt status through this IRS search tool, check with your auditor on your credit union’s filing status, and disregard the notice, as appropriate.
  2. Contact the IRS directly at the phone number on the notice: 877-829-5500. The IRS can confirm your credit union’s tax-exempt status remains valid, and no further action is needed on your part.
  3. Complete this Disclosure Authorization Form and return it to Senator Sherrod Brown’s Office at Joseph_Henry@brown.senate.gov for a direct IRS inquiry. Only those with signing authority should complete and sign the form. Senator Brown’s office is aware of the issue and expects your outreach.
  4. Email Director, Regulatory Affairs Sean Brown if your issue has been resolved.

Contacting the IRS remains challenging but, it is the only path forward to officially confirming the notice is innocuous. Feel free to choose any of the outreach options available and contact Director, Regulatory Affairs Sean Brown with any questions or concerns.

Thanks for making the League aware of this issue. Whenever a perceived threat against the credit union tax exemption arises, we get to work to protect your credit union and its members in the best way possible.

Contact Sean Brown for questions or assistance.

Sean Brown
Sean Brown Director, Regulatory Affairs E: sbrown@ohiocul.org
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