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Information for Federal and State Credit Unions Regarding Automatic Revocation of Exemption

Background

Congress enacted the Pension Protection Act of 2006, Pub. L. No.109-280, 120 Stat. 780, § 1223 (2006), which added section 6033(j) to the Internal Revenue Code. Section 6033(j) provides for the automatic revocation of tax-exempt status of any organization that fails to file a required annual information return (e.g., Form 990 or Form 990-EZ) for three consecutive years.

The law also requires the IRS to publish and maintain a list of organizations that are revoked for non-filing. The list, called the Auto-Revocation List, can be found here, as part of EO Select Check.

Two types of credit unions may be tax-exempt under section 501(a):

  1. Federal credit unions that are under the supervision of the National Credit Union Association (NCUA). Federal credit unions are tax exempt under section 501(c)(1) and are not required to file an annual information return.
  2. State credit unions that are chartered under state credit union laws and operate without profit and for the mutual benefit of their members. State credit unions are exempt under section 501(c)(14)(A) and are required to file an annual information return.

Federal and state credit unions have contacted the IRS for information about the following three situations related to IRS implementation of § 6033(j):

Situation One: A federal credit union appears on the Auto-Revocation List, even though federal credit unions are not required to file an annual return.

Situation Two: A state credit union appears on the Auto-Revocation List.

Situation Three: A credit union received one or two letters from the IRS stating its parent organization was no longer tax exempt.

Page Last Reviewed or Updated: 14-May-2014