IRS Conducting Compliance Checks of Credit Unions
The IRS is conducting compliance checks into whether the credit union taxpayers are adhering precisely to information reporting requirements regarding unrelated business income. Very specifically, they are looking at income from the sale of insurance products, financial service products and ATM transaction fees.
Compliance checks are reviews to determine whether a taxpayer is strictly adhering to necessary recordkeeping and information reporting requirements. It is neither an inspection nor an audit. Rather, it serves as a tool to help educate taxpayers about their reporting requirements to stimulate voluntary compliance. A taxpayer may refuse to participate in a compliance check without penalty. However, the IRS has the option of opening a formal investigation, whether or not the taxpayer agrees to participate in the compliance check. Naturally, a refusal to participate could be construed negatively and raise a flag for further scrutiny.
Should you receive an IRS Compliance Check Information Request Form – please do not hesitate to call our office for assistance. The deadline for responding to the notice is 30 days from date of letter.