IRS determination letter - Telephone cooperative not qualifying for exemption under section 501(c)(12) 

August 1: The IRS today publicly released a final adverse determination letter, concluding that a telephone cooperative does not qualify for an exemption under section 501(c)(12). LTR 201431031 (released August 1, 2014; dated May 6, 2014)

Read the adverse determination letter: LTR 201431031 [PDF 428 KB]

The telephone cooperative provides gateway (internet) and policy control services for members that are all companies that in turn provide telecommunication services to the public.

The IRS explained in the determination letter what are the requirements to qualify for exemption under section 501(c)(12) and, here, found that the taxpayer did not satisfy the three requirements: (1) the organizational and operational tests, (2) the activities test, and (3) the income source test.

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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