Credit unions and the IRS are gearing up for post-trial briefs, due Feb. 1, following the close of oral arguments last Friday in the case challenging the IRS' interpretation of unrelated business income tax.
The suit came about when Bello CU was ordered to pay UBIT on the income it made selling credit life and disability insurance, as well as royalties from accidental death and dismemberment insurance. Bellco of Greenwood Village, Colo. is arguing that credit life and disability is substantially related to the tax-exempt purpose of credit unions and that AD&D is merely royalty income, which is not subject to UBIT, according to CUNA General Counsel Eric Richard who attended to proceedings. The credit union is suing for $199,293 in UBIT.
Following the filing of the post-trial briefs, Richard said he expected that U.S. District Judge Christine M. Arguello could take weeks before making a ruling.
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