Credit Unions in the State of Arizonia

PART X, LINE 2:

“The credit union is exempt from most federal, state, and local taxes under the provisions of the internal revenue code and state tax laws. The income taxes topic of the fasb asc clarifies accounting for uncertainty in income taxes reported in the consolidated financial statement. The interpretation provides criteria for assessment of individual tax positions and a process for recognition and measurement of uncertain tax positions. Tax positions are evaluated on whether they meet the "more likely than not" standard for sustainability upon examination by tax authorities. The credit union is a state-chartered credit union as defined in internal revenue code (irc) section 501(c)(14). As such, the credit union is exempt from federal taxation of income derived from the performance of activities directly related to its exempt purposes. However, irc section 511 imposes a tax on the unrelated business income (ubi) derived by state-chartered credit unions. Beginning in march 2008, the internal revenue service (irs) released technical advice memorandums (tams) to specific state-chartered credit unions specifying the revenue sources subject to unrelated business income tax (ubit). Ubi may also be subject to tax in certain states. Management has assessed the credit union's activities and any potential federal or state income tax liability and determined that the credit union has no uncertain tax positions that qualify for either recognition or disclosure in the consolidated financial statement. Additionally, no interest or penalties have been recorded in the accompanying consolidated financial statement related to uncertain tax positions. Currently, the 2014, 2013, and 2012 federal income tax returns are open for examination by the irs. The filing years open for examination by the state, if applicable, may be equal to, greater than or less than the years open for examination by the irs.”