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Cooperative Accounting

Guest Post: CFC Comments on Accounting Standards

This post comes from CFC Solutions Newsletter, Vol. 15, No. 25, July 1, 2013.

CFC recently filed comments with the Financial Accounting Standards Board (FASB) and Private Company Council (PCC) in response to an invitation to comment on private company financial accounting and reporting standards. CFC’s comments support the continued use of ASC 980 Regulated Operations—formerly Statement of Financial Accounting Standards No. 71.Read More »Guest Post: CFC Comments on Accounting Standards

IRS Scrutinizes Section 501(c)(12) Cooperatives

In its 2013 Workplan, the IRS reported a “high level” of incorrect reporting by Section 501(c)(12) cooperatives.  These errors primarily related to “miscalculation and misreporting” of member income percentages.

The IRS conducted a compliance check of Section 501(c)(12) cooperatives.  The compliance check involved questionnaires and examinations.  The IRS concluded that one-fourth of the cooperatives either (i) failed the Member Income Test or (ii) were not being operated on a cooperative or mutual basis.  Given the high number of irregularities, cooperatives would be well advised to review these two important requirements. Read More »IRS Scrutinizes Section 501(c)(12) Cooperatives

AHC Cooperative Tax Brief: Telephone Cooperative’s Sale of Subsidiary

In the latest cooperative tax ruling, the Service ruled that a cooperative’s (“Cooperative”) gain on sale of stock in corporations that offered services to Cooperative’s members was patronage-sourced.  The ruling was important to Cooperative because it expected to fail the Member Income Test of Section 501(c)(12), subjecting Cooperative to regular corporate income tax.  The favorable ruling allowed Cooperative to avoid substantial taxes in the gain.

Read More »AHC Cooperative Tax Brief: Telephone Cooperative’s Sale of Subsidiary