FORT LAUDERDALE, Fla. — CUNA Mutual Group Senior Vice President Larry Blanchard, chair of the UBIT Steering Committee, asked for credit unions to volunteer as plaintiffs in a lawsuit the committee is preparing during NASCUS' State Summit today.
He explained that the steering committee has, and will continue, to work toward an administrative solution to the IRS' decision to subject certain credit union products as services to the unrelated business income tax. While progress has been made in certain areas Blanchard added that "the next step is to seek redress through the courts and challenge the agency's misguided reasoning. It will take credit unions' cooperation for it to be successful."
Without naming any names, some credit unions have already stepped forward, he said. "We need multiple plaintiffs to step forward for maximum flexibility as we put our case together," Blanchard stated.
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The IRS has determined that items such as accidental death and dismemberment insurance; group life, dental, health and cancer insurance; car buying service and car warranties; guaranteed auto protection insurance; credit life and disability insurance; MEMBERS financial management services; and nonmember ATM fee income to the unrelated business income tax. IRS technical advice memoranda so far have been issued in Connecticut, Alabama, and Colorado. Only state chartered credit unions would be subject to UBIT.
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