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IRS Revokes Credit Union Tax Exemption After “Unsafe and Unsound” Practices

News & Insights

Despite enjoying the same tax exemption state-chartered credit unions do, federally-chartered credit unions are not required to file Form 990 with the IRS. From CUInsight, authored by Peter Strozniak of the CU Times:

The IRS has revoked the tax-exempt status of a financially troubled California credit union.

The $590,634 Jones Methodist Church Credit Union in San Francisco, chartered in 1953 for its members who were being redlined or charged with unfair interest rates by banks, had its tax-exempt status automatically pulled on May 15, 2017 after the cooperative failed to file its Form 990 for three consecutive years.

The last time Methodist Church CU submitted its Form 990-N to the IRS was for tax year 2013, according to the federal agency. When a nonprofit organization, including any state-chartered credit union, fails to submit a Form 990 for three consecutive years, that organization’s tax-exempt status is automatically revoked.

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