GREEN BAY, Wisc. — The U.S. Department of Justice has made the first filing from the U.S. Government in the case of Community First Credit Union vs. The United States of America over whether or not the CU had to pay unrelated business income tax in the amount of $54,604.
The CU paid the tax for the taxable year-ending 2006 and admitted many of the facts of the CU's original complaint.
A lawyer familiar with procedures in tax cases but unable to comment for the record, characterized the government's filing as a procedural move and said it would not have been the place for the U.S. to make its arguments before the court as to why it should turn back the CU's complaint.
In its answer to the complaint the U.S. said it “lacks information or knowledge sufficient to form a belief” about whether the $947 million, state chartered CU is exempt from federal income taxes pursuant to the tax code. Perhaps significantly, the government also denied that only two of the CU's products and services, in this case two types of insurance, generated enough income for taxable purposes. This appeared to leave open a possibility that one outcome of the case could be a ruling where the CU actually faced a higher tax bill.
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