CUNA President/CEO Dan Mica has asked Treasury Secretary Henry Paulson for a meeting to discuss recent decisions that levels that have imposed taxes on certain aspects of credit union operations.
"Even as it has reinterpreted existing law to favor banks, the IRS has been aggressively reinterpreting existing law to increase the tax liabilities of state-chartered credit unions, leaving less funds for them to lend. After years of indecision, the IRS has issued 19 Technical Advice Memoranda overruling prior informal rulings that revenues from certain financial products offered by credit unions were substantially related to their tax-exempt purpose, and thus exempt from tax," Mica wrote in a letter to Paulson last week.
There are two lawsuits pending in federal courts by credit unions challenging the IRS' rulings on the UBIT. One was filed by Bellco Credit Union in Colorado and another by Community First Credit Union in Wisconsin.