Community First CU files complaint against IRS challenging UBIT

Community First CU made history last week by filing a complaint in federal court against the Internal Revenue Service (IRS) seeking a refund on taxes paid as part of the unrelated business income tax (UBIT) in 2006.

The complaint challenges UBIT, which requires credit unions to pay taxes on certain insurance products that the IRS defines as landing outside of the credit union’s main mission. By filing such a complaint, Community First CU hopes the court sets a precedent by ruling that the income derived from the sale of these products is not subject to tax.

The League fully supports Community First CU for taking on UBIT for the entire credit union system. Credit Union National Association (CUNA), the American Association of CU Leagues, the National Association of State CU Supervisors and CUNA Mutual Group, which comprise the UBIT Steering Committee, all support Community First as well.

Credit unions can learn more about UBIT at the 2008 Government Affairs Conference where Catherine Tierney, President and CEO of Community First CU will speak.

Read more about what is going on in Community First CU’s press release, as well as in articles from the CUNA News Now, Appleton Post Crescent and the Milwaukee Journal Sentinel.