In a key victory for credit unions, the Internal Revenue Service let last week's deadline for appealing the verdict against it in the lawsuit filed by Community First Credit Union pass without appealing.
In May, a federal jury ruled that the IRS erroneously levied the unrelated business income tax (UBIT) on three financial products sold by Community First Credit Union. The jury ruled that the government must refund the Appleton, Wis.-based credit union $54,604 that it paid for UBIT on sales of financial products.
"Clearly, the government was unwilling to expose its reasoning to review by the Court of Appeals even though it had an absolute right to obtain this appellate review," said CUNA General Counsel and Executive Vice President Eric Richard. "Now accountants and tax advisors to credit unions have this court decision as substantial authority that UBIT is not due on credit life insurance, credit disability insurance and guaranteed asset protection products."
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