Senator Wants IRS Oversight for Federal Credit Unions
Friday, April 27, 2018 9:00 AM

In a recent letter to the Acting Commissioner of the Internal Revenue Service, Senator Orrin Hatch is asking the IRS to require federal credit unions to file annual information returns with the agency in an effort to ensure that they are complying with the role Congress gave them.  In a recent article in Credit Union times, Hatch said if the IRS chooses to require federal credit unions to file Form 990, it could require just the largest and most complex to file.  And he made it clear that the IRS has the power to institute this requirement now and does not need congressional approval to do it. 

Under federal law, federal credit unions don’t have to file the informational return. However, state-chartered credit unions must file the document even though they are tax exempt.  Hatch has questioned whether the credit union tax exemption is outdated.

“Congress provided this exemption for express purposes and has an obligation to maintain oversight of credit union activity to ensure that they continue to fulfill its intended vision,” he said in his letter to the IRS.

He said that Congress and the IRS have the responsibility to monitor whether credit unions still deserve the tax exemption.  Hatch said that in recent years, the NCUA has relaxed field of membership rules, expanded commercial lending and permitted the use of alternative capital under certain circumstances.

Click here to read his letter to the IRS.

Source:  Credit Union Times