Bellco Sues IRS Over UBIT
WASHINGTON --Bellco Credit Union has sued the U.S. Internal Revenue Service to recover $199,000 in unrelated business income tax payments.
The Greenwood Village, Colorado-based credit union is disputing the taxes it paid in 2000, 2001 and 2003 based on revenue generated from sales of credit life and credit disability insurance during those years. Bellco is also claiming a refund for taxes based on revenue from the sales of accidental death and disability insurance and from its involvement in CFS Member Financial Services in 2003.
The lawsuit, filed in U.S. District Court in Denver, is the second credit union-originated lawsuit on this issue.
"Bellco Credit Union has made a strong case in its complaint, taking a critical stop toward compelling the tax agency to adopt a more reasonable position. Bellco deserves the gratitude of the credit union system for taking on this important policy issue, essentially seeking to right a wrong that IRS has committed by forcing cooperatively owned, not-for-profit credit unions to pay tax on some of the financial services they offer," CUNA General Counsel and Executive Vice President Eric Richard said.
Community First Credit Union's lawsuit over the IRS' interpretation of the UBIT with regards to credit union is scheduled to be heard next May 9. The case filed by the Appleton, Wisconsin-based credit union is set to be heard in U.S. District Court in Green Bay.