Jury selection is beginning today in a Madison, Wis. courtroom in the trial the IRS' interpretation of the unrelated business income tax with regard to credit unions.
Community First Credit Union is seeking a refund of $54,000 that the IRS claimed was owed based on the sale of credit life and credit disability insurance and guaranteed auto protection insurance. The Appleton, Wis.-based credit union contends that the IRS should not have levied UBIT on these services, because they are financial services that help mitigate the losses to the credit union, enable the credit union to grant loans and thus further the mission of credit unions.
The tax is only levied on state-chartered credit unions.
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A date hasn't been set for a trial in the second UBIT lawsuit-filed by Bellco Credit Union of Greenwood, Colo., which is seeking a refund of $199,000.
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