The IRS has announced that it is considering changes to reporting requirements regarding business taxpayers’ uncertain tax positions. It plans to develop a schedule that will require the annual disclosure of uncertain tax positions in the form of a concise description of those positions and information about their magnitude.
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On July 9, the International Accounting Standards Board (IASB) issued an International Financial Reporting Standard (IFRS) designed for use by small and medium-sized entities (SMEs), which are estimated to represent more than 95 per cent of all companies.
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The Internal Revenue Service has determined that voluntary charitable contributions by cooperative members of patronage-based distributions from their co-op qualify for deduction at the member level to the extent provided in I.R. Code sec. 170.
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IRS Releases Draft Instructions for 2008 Form 990, Seeks Public Comment
The Internal Revenue Service has announced that it is seeking public comments on the draft instructions to the 2008 Form 990, the annual return most tax-exempt organizations must use to report information about their operations. The instructions are for the redesigned Form 990 that organizations will file for their 2008 tax year (returns filed in 2009), which was released in final form in December 2007 (IRS news release IR-2007-204).
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Mandatory Electronic Filing for Larger Co-ops Proposed
KPMG has notified NSAC that the Joint Committee on Taxation has released JCS-1-08, Description of Revenue Provisions Contained in the President’s Fiscal Year 2009 Budget Proposal (March 2008).
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IRS Publishes Form 1120-C, U.S. Income Tax Return for Cooperative Associations, and Instructions
In July, 2007, the IRS issued final regulations providing that Subchapter T cooperatives must file their Federal income tax return using Form 1120-C, U.S. Income Tax Return for Cooperative Associations, beginning with the first tax year ending on or after December 31, 2007.  The regulation gives cooperatives the option to rely on the proposed regulations and file their return on Form 1120-C for tax years ending on or after December 31, 2006, and before December 31, 2007.The IRS has now published Form 1120-C and the Instructions for 2007.  They are available on the IRS web site, www.irs.gov.  Click on "More Forms and Publications," on the new page click on "Form and Instruction number," and in the new menu scroll down to "2007 Form 1120-C…" and "2007 Inst 1120-C…."

IRS Document Discusses Section 199 Calculations and Per-Unit Retains Paid in Money (PURPIMs)
IRS has released an Internal Legal Memorandum (letter ruling 200806011) that provides some interesting insights into how the IRS National Office views the payments by marketing cooperatives to patrons, at least in a section 199 context.  Some prior internal IRS documents on this issue have not been released, so any analysis of this relatively brief letter ruling here is limited as it isn't always clear just what point the author is responding to.
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FASB Issues Preliminary Views on Financial Instruments with Characteristics of Equity
The Financial Accounting Standards Board (FASB) has released a Preliminary Views (PV) document, Financial Instruments with Characteristics of Equity, announcing its intention to adopt the "basic ownership approach" as its preferred method of accounting for financial instruments.
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FASB Issues Statement No. 141, Business Combinations (revised 2007)
The Financial Accounting Standards Board (FASB) has issued a revised Statement No. 141, Business Combinations.
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FASB Issues Statement No. 160, Noncontolling Interests in Consolidated Financial Statements
The Financial Accounting Standards Board (FASB) has issued Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements. This Statement defines a noncontrolling interest as the portion of equity in a subsidiary not attributable, directly or indirectly, to the parent. 
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FASB Delay Implementation of FIN 48 for Nonpublic Companies
At their meeting today, the FASB agreed to delay implementation of FIN 48 for nonpublic companies this morning for one year (i.e., from "for fiscal years beginning after December 15, 2006" to "for fiscal years beginning after December 15, 2007") for those nonpublic companies that have yet to adopt FIN 48. This is good news for all rural electric coops. Please let your auditors know.

PCAOB Reports on Audit Deficiencies in Smaller Audit Firms
The Public Company Accounting Oversight Board has released a report discussing 11 problem areas (significant or frequent deficiencies) found during its inspections of firms that audit no more than 100 public "issuers" as defined in the Sarbanes Oxley Act of 2002. 

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Favorable Ruling for Housing Co-op Member-Residents
Internal Revenue Code sec. 216 provides that “tenant-shareholders” of a housing cooperative may deduct from their personal taxes amounts paid to the co-op to cover their proportionate share of the co-op’s real estate taxes and interest obligation on debt used to acquire the building and land it sits on.  The term “housing cooperative” is defined to include several limitations, one of which is that the entity may have only one class of stock.
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FAF President and COO to Resign, Interim COO Selected
"CFO.com" reports that Robert DeSantis will resign as president and chief operating officer of the Financial Accounting Foundation (FAF).  FAF is the parent organization of the Financial Accounting Standards Board and the Governmental Accounting Standards Board. Teresa Polley, executive director of FASB Advisory Groups, will take over as interim COO when Mr. DeSantis leaves on September 21.  No direct impact on cooperatives is foreseen because of this leadership change at the FAF.  More information can be found at www.cfo.com.

IRS Filing Instructions for Subchapter T Cooperatives
In July 2007, the IRS published final Regulations providing that Subchapter T cooperatives must file their income tax returns using Form 1120-C, U.S. Income Tax Return for Cooperative Associations, beginning with the first tax year ending on or after December 31, 2007 (T.D. 9336).
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The Treasury Department just issued a “clarification” to the Final Regulation on Section 199.   
For more information go to the Members Only section and click on Tax Issues.
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ANNOUNCEMENT FROM NSAC TAX COMMITTEE
FORM 1120-C is here for 2006 returns
On December 22, 2006, the IRS posted on its website a revised Draft Form 1120-C, "U.S. Income Tax Return for Cooperative Organizations." Note that the new Form will have to be filed by ALL cooperatives, not just agricultural cooperatives as was the case with Form 990-C. Form 990-C will no longer be accepted for years ended on or after December 31, 2006. Cooperatives that have used Form 1120 will have to convert to the Form 1120-C.
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NCFC Response to Form 1120-C
Starting with taxable years ending on or after December 31, 2006, farmer cooperatives will be required to file new Form 1120-C, “U.S. Income Tax Return for Cooperative Organizations.”  The IRS posted a Draft Form 1120-C on its website last month and a Working Group of the LTA Committee of the NCFC has developed comments on the Draft.  The working group identified numerous problems with the draft form and instructions, including several instances in which the form and instructions contradict the IRS Code.  Accordingly, NCFC requested that the IRS revise portions of the form and instructions and delay implementation of Form 1120-C.  The comments were submitted to the IRS on November 9th by NCFC; the full text of NCFC's submission is attached

FASB Feb 15
To review a file updating our members on the status of the liability and equity project and the milestone draft that was issued two weeks ago.
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NSAC Distance Learning
The mission statement of the National Society of Accountants for Cooperatives (NSAC) includes a statement that the NSAC will provide accounting, tax, and business education uniquely tailored to cooperatives. Over the years, the Accounting and Auditing Seminars have been presented by the chapters and educational topics are presented at the Annual Meeting.

However, only a small portion of our members have an opportunity to participate in these learning activities. A survey of members last June indicated there would be interest in members participating in Web-based training. Members could remain in their offices and not have to incur the cost of travel or time out of the office to participate in educational opportunities As a result, the NSAC will present a series of management-related training topics over .the Web during the next six months.
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