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IRS Private Letter Ruling

Cooperative Tax Brief: Cooperatives May Offset Bad Debt With Capital Credit Balances

Cooperatives May Offset Bad Debt With Capital Credit Balances

Like for-profit companies, cooperatives encounter bad debt of members and patrons.  They can initiate collection efforts to pursue bad debts, but because their members are also their owners, debt collection can be a complicated endeavor.  With regard to former members, a recent IRS private ruling discussed an alternative option for recovering outstanding balances.

To view the latest Cooperative Tax Brief, click here or continue reading below.

Read More »Cooperative Tax Brief: Cooperatives May Offset Bad Debt With Capital Credit Balances

Ruling Addresses Cooperative’s Consolidation and Liquidation of Subsidiaries

Cooperative’s Consolidation and Liquidation of Subsidiaries

[To view this post in the typical AHC Cooperative Tax Brief format, click here.]

Like for-profit corporations owned by investors and shareholders, cooperatives provide services through subsidiaries.  Whereas for-profit corporations own and operate subsidiaries to generate greater income for shareholders, cooperatives typically own and operate subsidiaries to provide diverse services to patrons and non-patrons.  Like corporations, however, cooperatives occasionally find advantages in liquidating and consolidating subsidiaries when their need for such subsidiaries expires. Read More »Ruling Addresses Cooperative’s Consolidation and Liquidation of Subsidiaries

IRS Revokes Potentially Beneficial Ruling for Renewable Energy Developers

A prior blog post discussed a private ruling by the service regarding the allocation of purchase price among the assets of a renewable energy developer.  Attorney David R. Cook discussed the ruling in a webinar on PPA taxation and recommended the participants to read the ruling with a dose of skepticism.  As it turns out, on reconsideration, the Service has revoked the prior ruling because it “is not in accord with the current views of the Service.” Read More »IRS Revokes Potentially Beneficial Ruling for Renewable Energy Developers

Cooperative Litigation Update: N.C. Court Rules on Coop’s Discounting Program

In another lawsuit concerning cooperatives’ capital credit practices, a North Carolina trial court ruled in favor of a cooperative that we previously wrote about in another blog post.

The court ruled, based on the facts at issue, that the cooperative had no fiduciary duty to the plaintiffs, which were a group of deceased members’ estates.  In addition, it declared that the cooperative had authority to adopt a procedure for retiring deceased members’ capital credits on an accelerated and discounted basis.  However, it expressly did not rule on whether the cooperative, in practice, properly discounted the capital credits.   In other words, the court reserved judgment on the specific manner of discounting the particular capital credits at issue in this case. Read More »Cooperative Litigation Update: N.C. Court Rules on Coop’s Discounting Program

Cooperative Litigation Update: Texas Cooperative Lawsuit Considered on Appeal

Earlier this past July, the Texas Court of Appeals ruled on important aspects of the cooperative lawsuit concerning Denton County Electric Cooperative, Inc., d/b/a CoServ Electric (“CoServ”).  The court ruled, among other things, that (i) the cooperative was not subject to certain statutory rules governing non-profit corporations, and (ii) the electric cooperative statute did not impose a fiduciary duty on the cooperative itself.  Read More »Cooperative Litigation Update: Texas Cooperative Lawsuit Considered on Appeal

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

AHC Attorney David Cook Presents Webinar on Power Purchase Agreements

AHC attorney David R. Cook will present a webinar regarding the legal and tax aspects of power purchase agreements (PPAs). Along with two other power industry professionals, he will address accounting and tax issues involved with PPAs.  In addition, David will discuss important provisions in PPAs for allocating the risks and benefits arising from PPAs.Read More »AHC Attorney David Cook Presents Webinar on Power Purchase Agreements