HERSHEY, Pa. — Speaking at the Pennsylvania CU Association's 73rd Annual Meeting today, NASCUS President Mary Martha Fortney said that a plaintiff credit union to sue the IRS over its rulings on Unrelated Business Income Tax has been identified.
Fortney said for now the UBIT Steering Committee, made up of NASCUS, CUNA, CUNA Mutual Group, and the American Association of CU Leagues, is choosing to keep the identity of the CU confidential. It is also not revealing what state the CU is from, which will be key for the lawsuit.
The IRS has been auditing state chartered credit unions in Connecticut, Colorado and Alabama for UBIT, however an audit is not necessary for the CU suing the IRS. When the committee first announced it would go the litigation route, Wisconsin was bandied about as a potentially favorable legal environment for the case.
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Fortney noted that the committee was hoping to get multiple plaintiffs, but so far just one has stepped forward. That CU has filed its UBIT return, and will then ask for a refund, knowing the IRS won't grant it. After that, it can bring suit. Fortney estimated the suit will be filed in November.
Fortney also alluded to bankers' influence in the IRS' focus on UBIT with credit unions. A number of industry sources say the role bankers have played will soon come to light.
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