Revenues from shared-branching arrangements are among the items subject to the unrelated business income tax, according to an IRS technical advice memorandum.
The IRS memorandum also said that management services to other credit unions, certain CUSOs, and sales of financial management services and certain insurance products are subject to the UBIT.
The IRS said that the fees that the credit union derived from shared branching should be taxable because "they are primarily for the purpose of generating income and for the for the benefit of the non-member user rather than for the benefit of the credit union's membership."
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