IRS Appealing Credit Union-Favorable Bellco UBIT Court Decision
August 23, 2010 The U.S. government filed an appeal disputing a credit union-favorable court decision in the unrelated business income tax (UBIT) challenge brought by Colorado-based Bellco Credit Union.
In 2009, Judge Christine M. Arguello ruled that income from investment products sold to members, and income derived from credit life and disability insurance, sold directly or indirectly, as well as royalty income from accidental death and dismemberment (AD&D) insurance should not be subject to UBIT.
As a member of the UBIT Steering Committee, NASCUS along with CUNA, CUNA Mutual and AACUL continue to challenge the Internal Revenue Service (IRS) application of UBIT on state-chartered credit unions. In May 2009, an eight-person jury determined that income from credit life and disability insurance should not be subject to UBIT in the case brought by Wisconsin-based Community First Credit Union.
NASCUS will keep you posted about developments in the appeal process.