Chief Counsel advice - Consumer cooperative exemption under section 6044 

May 16:  The IRS today publicly released a Chief Counsel Advice memorandum that responds to a request as how the IRS personnel is to respond when a Form 3491, Consumer Cooperative Exemption Application, lists a principal activity of the organization that appears inconsistent with a requirement for exemption because the listed activity does not involve retail sales. CCA 201420019 (release date May 16, 2014)

The “redacted” memo explains that for a cooperative to qualify for an exemption from certain reporting requirements under section 6044, 85% of its gross receipts must have been derived from the retail sale of such goods or services.

Because in this situation the principal activity listed on the application does not appear to incorporate any retail sales at all, the memo states that this “brings into question an assertion on the application that 85% or more of the corporation’s receipts were retail sales of the requisite goods and services.”

Read the IRS memo [PDF 54 KB]

For more information, contact KPMG’s National Director of Cooperative Tax Services:

David Antoni, in Philadelphia

(267) 256-1627

Or Associate National Director of KPMG’s Cooperative Tax Services

Brett Huston, in Sacramento

(916) 554-1654

©2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

The KPMG logo and name are trademarks of KPMG International.

KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.

The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Direct comments, including requests for subscriptions, to
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

Share this

Share this


Current and future KPMG clients may subscribe to TaxNewsFlash email alerts.

Email your contact information.

Other TaxNewsFlash publications

TaxNewsFlash-Cooperatives by year