WASHINGTON — The running argument via letter between bank and credit union lobbyists and the U.S. Treasury Department has continued this week as Edward Yingling, President and CEO of the American Bankers Association sent a follow up letter on the matter.


In an August 13 letter to Kevin Brown, Acting Commissioner of the Internal Revenue Service, Yingling took issue with Dan Mica's recent letter to the U.S. Treasury reaffirming that position that CU's should not be taxed. Yingling countered Mica by suggesting that CUs were now involved in "new activities beyond their mission" that merit taxation.


"This year alone, the IRS has issued at least twelve technical advice memorandums [sic] (TAMs) which take the position that the unrelated business income tax applies to various services and products provided by state-chartered credit unions," Yingling wrote, adding, "including, among others, income from insurance sales (e.g. credit life, disability life health, group life and accidental death and dismemberment), sale of car warranties, and ATM fees for non-member services. The real issue here is not the IRS applied UBIT to these activities but whether UBIT should be applied on similar activities of federally-chartered credit unions," Yingling wrote.

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