WASHINGTON (5/28/08)—-Monday is the deadline for credit unions to voice concerns about the Internal Revenue Service (IRS) draft instructions for a newly redesigned Form 990. The new IRS form, Return of Organization Exempt from Income Tax, is effective for the 2008 tax year, for returns filed in 2009. State chartered credit unions are required to file Form 990 with the IRS annually, although a few states still permit group 990 filings. Federal credit unions are not required to file, since they are not subject to unrelated business income taxes. These new draft instructions are more comprehensive than earlier ones and have been modified to reflect the new format of Form 990. The Credit Union National Association (CUNA) has identified some concerns with the draft instructions. Among them:
* The thresholds for reporting employee compensation is too low; * The definition of "key employee" is too broad and may unintentionally include non-crucial employees without sufficient authority; * For group returns, the special instructions regarding the compensation section should include an option to aggregate information from all organizations included in the return; and * Also for group returns, parent organizations should be permitted to change the option regarding the method of filing without having to receive IRS consent. Alternatively, providing a notice of change to the IRS should be sufficient.
Comments are due to the IRS by June 1. Use the resource link below to access CUNA's complete comment call.