Depending on structure, co-ops often do face special tax reporting requirements. Moreover, in this case the fact that Vanguard is a co-op is a redeeming factor

Depending on structure, co-ops often do face special tax reporting requirements. Moreover, in this case the fact that Vanguard is a co-op is a redeeming factor. If it were a typical corporation charging itself below-market transfer prices, that would likely be illegal.