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




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