Distinguishing between patronage, nonpatronage and nonmember income

Date: Tuesday, September 29, 2020
Time: 02:00 PM ET / 01:00 PM CT / 12:00 PM MT / 11:00 AM PT [Prevailing Time]
Presenters: Rebecca Thoune, CPA, Signing Director, CliftonLarsonAllen LLP (CLA), George Benson, Counsel, McDermott Will & Emery LLP, Teree Castanias, Teresa Castanias, CPA
Moderator:
Learning Objectives:
Review patronage and non-patronage allocations and their consequences to cooperatives and their members
Review proposed regulations and the consequences to patronage allocations if finalized
Understand the consequences of CARES act incentives on patronage allocations
Field of Study: Taxes
Program Level: Basic
CPE Credit: 1 Credit Hour- must answer 3 attendance questions during presentation
Delivery Method: Group Internet-based
Prerequisite(s): No advanced preparation or prerequisites are required for this course.
  Order Recording

Course Description

This session will discuss the consequences of patronage distributions and/or patronage retentions in the current environment. Panelists will discuss prior case law and the proposed regulations as well as the consequences of both in the current environment.

Presenter and Moderator Bios

Presenter: Rebecca Thoune, CPA, Signing Director, CliftonLarsonAllen LLP (CLA)

Rebecca Thoune has an extensive background providing tax planning and compliance for privately held companies, serving primarily cooperatives and the agribusiness industry. She works with clients on federal and state strategic tax planning, equity planning and management, maximizing cooperative and patron benefits, business structure consulting, and provides representation before the IRS and other state taxing authorities. Rebecca has 23+ years of tax experience in public accounting and has held various tax leadership roles throughout her career. Rebecca has spoken to various local and national organizations on technical tax topics such as the principles of cooperative taxation, tax planning and reform, equity management, COVID relief including PPP loans & forgiveness, and various state tax matters. Rebecca serves as the cooperative national tax director for CliftonLarsonAllen LLP.

Presenter: George Benson, Counsel, McDermott Will & Emery LLP

George Benson advises clients on federal income tax planning, tax controversy and tax litigation matters, particularly in the area of cooperative taxation. George's tax work for cooperatives covers a broad range of issues that arise for cooperatives from their unique status as corporations operating on a cooperative basis. He advises cooperatives with respect to computing, allocating and paying patronage dividends and per-unit retain allocations in accordance with the rules of Subchapter T. His advice in these areas relates to such matters as determining net income or proceeds available for distribution (including distinguishing between patronage and non-patronage income), determining how net income or proceeds should be shared on a patronage basis among patrons (including using allocation units and pools), handling losses, allocating extraordinary gains, and using qualified and nonqualified written notices of allocation and per-unit retain certificates. Over the years, George has provided assistance to cooperatives whose patronage dividends and per-unit retain allocations have been questioned on audit by the Internal Revenue Service. George has helped form new cooperatives, convert existing businesses into cooperative forms (and, where appropriate, obtain letter rulings affirming their cooperative status), convert cooperatives into other forms of business, and convert Section 521 cooperatives and Section 501(e) cooperatives into nonexempt Subchapter T cooperatives. He has provided assistance to cooperatives purchasing or selling assets, entering into joint ventures with cooperatives and others, merging with other cooperatives, or going through the process of liquidation and dissolution. He has assisted cooperatives with cooperative tax and other issues that arise when they engage in business outside of the United States. George has helped cooperatives with financing and capital structure issues that arise as a result of the constraints of the cooperative form of business. He has worked on issues arising from the interplay of Subchapter T with the other provisions of the Internal Revenue Code, including those of Subchapter C. He also has advised cooperatives dealing with issues arising when a cooperative is included in a consolidated return. George advises Section 521 cooperatives with respect to the requirements for maintaining that status. He has successfully defended cooperatives whose nonexempt Subchapter T, Section 521 or Section 501(e) cooperative status has been challenged by the Internal Revenue Service. He has assisted taxable rural electric and telephone cooperatives with matters related to pre-Subchapter T cooperative tax law. Since the enactment of Section 199 (the domestic production activities deduction), George has assisted cooperatives on the many tax issues that the section presents for them. That work has included including obtaining letter rulings with respect to issues under Section 199 and representing cooperatives in controversies over the application of that section. George writes and lectures frequently on cooperative tax matters and is the editor of the TAXFAX column in The Cooperative Accountant.

Presenter: Teree Castanias, Teresa Castanias, CPA

Teree Castanias has a tax consulting practice focused on cooperative issues and other business and individual tax matters. She has provided tax consulting, compliance, and tax provision services to many companies, including cooperatives and non-cooperative enterprises in food production, manufacturing, distribution and retail, rural electric and telephone, Farm Credit System agricultural lending, banking and financial services. She has had a broad range of experience with all types of cooperatives and non-cooperative businesses, including sole proprietorships, partnerships, limited liability companies, C and S corporations. She has also worked extensively with individuals, assisting in income tax, retirement, estate and gift, and financial planning. She also works with clients in equine-related businesses.

Teree's professional tax accounting experience has spanned over 40 years. She was with KPMG for over 32 years, and a tax partner for over 23 years, in the Seattle and Sacramento offices. She led KPMG’s Cooperative Tax practice from 2000 to 2009. She has had my own tax practice since October 2009.

Teree is a member of the AICPA and the California Society of CPAs. She has substantial experience planning federal and state tax work to many clients. She also provides subject matter knowledge and guidance on cooperative issues. Teree is a former Chair and a current member of the Legal, Tax and Accounting Committee of the National Council of Farmer Cooperatives (NCFC)  She is also a former Chair and a current member of the Tax Committee of the National Society of Accountants for Cooperatives (NSAC). She is also past board member of NSAC's National board and Far Western Chapter and a frequent speaker concerning tax issues related to cooperatives at annual meetings of the NCFC and NSAC. In addition, Teree is a periodic contributor of articles on current developments in cooperative taxation for the NSAC's The Cooperative Accountant publication. She is a member of the Board of Directors of Farm Credit West, A.C.A. 

Cost
Free for NSAC Members / $56.00 for Non-Members

Delivery System

• All programs are delivered using the Zoom platform.
• Confirmations will include log-in instructions.
• Participants are able to participate using any device with an Internet connect (if the device does not have speakers, the participant can also dial-in) or they can participate with audio only by dialing in.
• All registrants will receive a link to the CLN’s recording by email within 48 business hours of event’s conclusion.
• There will be assistance available to help with technical and connectivity issues up to 10 minutes prior to the start of the presentation.

Registration

All registration is done on-line and each guest must provide their name and email address to participate. All NSAC members may register for free. Non-members may register for a nominal fee.

Refund Policy

NSAC will not issue refunds for CLNs. If a registrant is unable to participate in the CLN and provides notification to info@nsacoop.org 48 hours prior to the session, a credit will be provided for a future CLN. Alert the NSAC staff member monitoring the CLN if technical difficulties are encountered and technical support will be provided to eliminate problems with future CLNs.

Additional Information

Live participation is required for CPE credit and polling questions must be answered to document your active participation. All registrants will receive an email following the session with links to the slides and/or handouts, and a link to the CLN recording (unless otherwise stated). If you are unable to participate in the live session, you can still watch the recorded session, but you will not be eligible for CPE credits. Those eligible for credits will receive their certificate by email with 7 business days.

For more information regarding NSAC CLNs or administrative policies such as complaint and refund, contact the NSAC Headquarters, 7946 Clyo Road, Suite A, Centerville, OH 45459, 937-222-6707, or info@nsacoop.org.