WASHINGTON — Credit unions, which have already taken their fightagainst the unrelated business income tax to the courts, are nowtrying to get a hearing in the higher reaches of the executivebranch.
CUNA President/CEO Dan Mica has asked Treasury Secretary HenryPaulson for a meeting to discuss recent decisions that levels thathave imposed taxes on certain aspects of credit unionoperations.
“Even as it has reinterpreted existing law to favor banks, the IRShas been aggressively reinterpreting existing law to increase thetax liabilities of state-chartered credit unions, leaving lessfunds for them to lend. After years of indecision, the IRS hasissued 19 Technical Advice Memoranda overruling prior informalrulings that revenues from certain financial products offered bycredit unions were substantially related to their tax-exemptpurpose, and thus exempt from tax,” Mica wrote in a letter toPaulson last week.
There are two lawsuits pending in federal courts by credit unionschallenging the IRS' rulings on the UBIT. One was filed by BellcoCredit Union in Colorado and another by Community First CreditUnion in Wisconsin.
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