Is Worker Co-op Patronage Subject to Employment Tax?

Attorney Greg Wilson gave a short presentation at the USFWC members meeting on the status of the IRS' audit of two worker cooperatives. The audit is making the claim that the cooperative businesses' patronage payments should be subject to employment tax - a reversal of strategy from their previous claim that cooperative workers' patronage should be subject to self-employment tax.

More information about this is available in several of Greg's online reports, including:

• A short overview on the issue at the Katovich Law Group blog from 2009.

• Taxation of Patronage Dividends from Worker Cooperatives: Are They Subject to Employment Tax?", a workshop presentation to the 2008 USFWC member meeting.

• Taxation of Patronage Dividends from Worker Cooperatives: Are They Subject to Employment Tax?", from 2008. 

• And for good meausure, see Greg's Introduction to Cooperatives",  presented to the American Bar Association in 2009.