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NASCUS announces positive resolution on crucial UBIT issues
ARLINGTON, VA (April 9, 2014) – Today, the UBIT Steering Committee, of which NASCUS is a member, announced that the Internal Revenue Service has issued a memorandum that clears nearly all credit union products at stake in the litigation from being subject to unrelated business income tax (UBIT). The IRS action opens the door for credit unions to receive refunds of past payments.
The announcement follows nearly 15 years of work on this issue by NASCUS and its coalition partners on the UBIT Steering Committee. “That the IRS has finally taken this step is welcome news,” said NASCUS President and CEO Mary Martha Fortney. “It has been a long time coming, and is a significant win for the entire credit union system.”
In addition to NASCUS, the UBIT Steering Committee includes the Credit Union National Association; CUNA Mutual Group; and the American Association of Credit Union Leagues.
A turning point in the work on UBIT came in 2009, when Community First Credit Union, of Appleton, Wis., prevailed in a jury trial against the IRS on UBIT issues, and when a federal court in Colorado ruled in favor of Bellco Credit Union, of Greenwood Village, Colo., also prevailed on UBIT issues in federal court. The steering committee had worked closely with both credit unions in support of the litigation.
“Many people from all over the credit union movement have contributed to this positive outcome with their dedication and unrelenting focus on this issue through the years, but special thanks is certainly due to Community First and Bellco for their willingness to step forward to take this to court,” Fortney said.
While the IRS memo represents a significant step forward for the state system, more work remains to be done with respect to several outstanding UBIT issues. NASCUS will continue its work with its coalition partners until there is a fully satisfactory resolution on all UBIT issues.
About NASCUS
The National Association of State Credit Union Supervisors (NASCUS) is the primary resource and voice of the state governmental agencies that charter, regulate and examine the nation’s state-chartered credit unions. NASCUS membership is made up of state-chartered credit unions, state regulators and other supporters of the state credit union system. NASCUS is the only organization dedicated to the defense and promotion of the state credit union charter and the autonomy of state credit union regulatory agencies. To learn more about NASCUS, visit www.nascus.org.