WASHINGTON — The American Bankers Association has appealed to the Internal Revenue Service to impose the unrelated business income tax on income from nonmember business loans that are on the books of state-chartered credit unions around the country.
ABA Senior Economist Keith Leggett sent a Feb. 8 letter to the IRS that included a list of specific credit unions and the amount of their nonmember business loans. CUNA General Counsel Eric Richard said the ABA's letter is "tantamount to harassment," CUNA News Now reported. "The types of transactions ABA is seeking to challenge are wholly consistent with the purpose and historic mission of credit unions," Richard said adding, "Rest assured that CUNA will be filing a well-crafted response with the IRS to clarify all the facts shortly."
CUNA contacted the IRS division of exempt organizations examinations asking the agency to refrain from any action in response to the ABA letter until CUNA's response can be considered.
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The correspondence asks the IRS not to become a tool in the bankers' decades-long campaign to destroy credit unions and to take away consumers' choice of a not-for-profit, member-owned, cooperative financial services alternative.
"We urge you not to allow the IRS to be drawn into this plan as a result of the ABA's one-sided and misleading correspondence," Richard wrote.
Richard said CUNA is currently working with the other members of the UBIT Steering Committee to develop a strong response to the ABA letter and will file a rebuttal promptly with the IRS. The UBIT Steering Committee is comprised of representatives of CUNA, CUNA Mutual, the National Association of State Credit Union Supervisors, and the American Association of Credit Union Leagues.
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