WASHINGTON (8/31/10)--The Presidential Economic Recovery Advisory Board (PERAB) has released a comprehensive report on possible tax revisions, each intended to simplify the tax system, improve taxpayer compliance with existing tax laws, and reform the corporate tax system. The report represents a laundry list of options that the government could pursue in order to reform tax law, but is not a blueprint for government action. In fact, the board itself emphasized that it is “an outside advisory panel and is not part of the Obama administration.” Under Section IV, the corporate tax reform pages, and under the subhead of “Eliminate Other Tax Expenditures,” the report dedicates four lines to the possibility of eliminating the federal credit union tax exemption to raise revenue and “level the playing field.” ‘Unlike other financial institutions like banks and thrifts, credit unions do not pay corporate taxes on their income. This puts them at a competitive advantage relative to other financial institutions for tax reasons. Eliminating this exemption would raise revenue and level the playing field, but would clearly raise taxes on credit unions,” the report says in full. The subsection also discusses the low-income housing credit and special employee stock ownership plan (ESOP) rules. The PERAB, also known as the Volcker Commission because the 16-member panel is headed by former Federal Reserve Board Chairman Paul Volcker, released its 118-page report on Friday. Credit Union National Association (CUNA) President/CEO Bill Cheney said, “While it is always a grave concern to CUNA and credit unions to have the credit union tax status come into question, credit unions should be aware that the advisory board report is simply an exploration of all policy-change options. “The threat to the credit union tax status is always alive. Bankers are always pushing for tax advantages while attacking the tax status, which belongs to credit unions because of our not-for-profit, cooperative structure,” Cheney added. “The ‘level-playing field’ language is often employed by the banks to justify their hypocritical attack on credit union tax status. We will continue to educate policymakers regarding the credit union difference, which reinforces the uniqueness of credit unions, in structure and service, from other financial institutions.” Also included in the board’s report are tax-change options that involve subchapter S corporations, a structure sometime used by banks to reduce their tax obligation. Sections on at least six pages of the report discuss subchapter S arrangements. The report also details the lack of taxpayer compliance with current laws.