Wisconsin Credit Union League: Banking Trade Association Distorts Facts About Credit Union Lawsuit Against the IRS
PEWAUKEE, Wis., Jan. 21 (www.allCunews.com) -- "There they go
again, distorting the facts to promote their anti-consumer, tax-increase
League in reference to a press release by the Wisconsin Bankers Association
(WBA) that suggested Community First Credit Union's lawsuit against the IRS
for overpayment of taxes represents a larger attempt by Wisconsin credit
unions to avoid paying taxes.
"That's simply not true," says Thompson. "Wisconsin credit unions pay
millions in taxes annually. The lawsuit isn't about money, but serving
He says that the suit, through which Community First seeks a refund of
$54,000 that the IRS claimed was owed based on the sale of credit life &
credit disability insurance and guaranteed auto protection (GAP) insurance,
aims to achieve legal clarification about what might be subject to
unrelated business income tax (UBIT). Thompson says the IRS erred in
applying UBIT to these services because they are financial services that
help mitigate losses to the credit union, enable the credit union to grant
loans and thus further the mission of this -- and other credit unions
nationwide -- to serve members.
Thompson says the suit has the support of The League, Credit Union
National Association, CUNA Mutual and National Association of State Credit
Union Supervisors because it is essentially an effort based on principle.
"Like all credit unions, Community First exists to offer financial
products that contribute to the financial well-being of its member-owners.
The services for which Community First paid the unrelated business income
tax are in fact central to that mission -- and to the mission of all credit
unions who offer them. It's about preserving the ideals of credit unions as
not-for-profit, member-owned cooperatives," Thompson emphasizes.
He says WBA misses this point, failing to address the UBIT issue
entirely and instead continuing to reference its own flawed, self-funded
"study" of credit unions to push for a tax increase agenda through credit
"When you've been called out in the past for using flawed information,
isn't it time to stop?" Thompson asks.
WBA's assertion that Wisconsin credit unions deny the state millions in
tax revenue further jumps the tracks; Thompson says the lawsuit, filed in
the Eastern District Federal Court, is a federal -- not state -- tax issue.
"It's really Wisconsin banks that have been in the hot seat when it
comes to state taxes," Thompson adds. He says that more than 87 Wisconsin
banks challenged the state Department of Revenue over the past few years --
ultimately reaching settlements -- when the agency claimed they had been
using subsidiaries with no purpose other than to avoid paying state taxes.
Some of the state's largest banks paid no taxes at all."
"That's skirting taxes, period, not seeking a refund on an overpayment,
as is the case with the credit union," Thompson says. "The WBA would do
well to heed the adage to refrain from throwing stones when you live in a
SOURCE Wisconsin Credit Union League