What We Have Seen in Cooperatives in 2012

As a cooperative, you are allowed to allocate various taxable items to your members.  Common items include qualified patronage and the section 199 deduction.  This benefit comes with some specific rules regarding reporting to your members and reporting to the Internal Revenue Service. When cooperatives make allocations to their members, they generally  have up to 81/2...

Organizations with fewer than 100 employees significantly trail their counterparts in the implementation of formal antifraud controls, according to a worldwide survey by the Association of Certified Fraud Examiners (ACFE).  Antifraud experts say formal controls can help small businesses prevent and detect instances of fraud that, left undiscovered, could lead to costly losses and possibly...

The USDA released its listing of the top 100 agricultural cooperatives much sooner for the 2011 year.  Agricultural cooperatives had record sales and income in 2011, surpassing the previous record set in 2008.  These 100 coops reported record sales of $148 billion in 2011, an increase of almost 30% over 2010.  Net income for the...

The Internal Revenue Service is sending out penalty assessments regarding what they are referring to as improper reporting of taxpayer identification numbers on forms 1099.  They are assessing penalties at the rate of $50 per occurrence.  Many cooperatives issue thousands of 1099's and are receiving notices indicating problems with in excess of 150 1099's.  Penalties...

During the last legislative session, House File 2455 was passed initiating changes in governmental audit requirements. Currently, all Iowa cities with a population over 2,000 are required to receive an annual audit. Cities with population from 700 to 2,000 are required to be audited once every four years and cities with a population under 700 are not required to be audited, except by petition of the citizens. The Cities had the option to hire a CPA firm or the Auditor of State to perform the audit through the request for proposal process, and cities paid a filing fee based on budgeted expenditures to the State Auditor’s Office with the submission of their report.