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March 21, 2008 - In a letter dated March 19, the UBIT case filed by Community First Credit Union in Appleton, Wisconsin has been assigned to U.S. District Judge William C. Griesbach of the Eastern District of Wisconsin.
In the suit, Community First is requesting that the IRS refund more than $54,000 in taxes paid on income from the sale of credit life and credit disability insurance and guaranteed auto protection (GAP). Community First asserts that these products are related to the mission and purpose of the credit union and therefore should not be subject to UBIT.
The UBIT Steering Committee, of which NASCUS is a member, supports Community First’s efforts to challenge IRS’ application of UBIT on state-chartered credit unions. In early March 2008, the IRS responded to the lawsuit and asserted that the credit union is not eligible for the refund. The UBIT Steering Committee expected this response and the litigation will move forward as planned.
A scheduling conference is also planned for May 9 between the parties in involved in the case to establish a scheduling order for hearing and filing motions, disclosing experts and completing discovery. After this call, the UBIT Steering Committee expects to know more about the timeline for the trial.
NASCUS will provide updates on its website as news develops. To view UBIT resources, follow this link. (Member log-in required.)
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