IRS Guidance Coming On UBIT
WASHINGTON - (02/24/06) The Internal Revenue Service isexpected to issue long-sought guidelines over the next few weeks onwhat is and is not taxable under the Unrelated Business Income Tax,or UBIT, paid by state chartered credit unions. The IRS is planningto issue a Technical Advice Memorandum on tax treatment of incomeconsidered unrelated to a credit unions principle businesspurpose, or UBIT, sources with the Treasury Department told TheCredit Union Journal. The memorandum is expected to outline typesof income creating potential income tax liabilities, includinginsurance sales and certain non-member ATM fees. Credit unions havebeen tangling with the IRS for years over what should be consideredunrelated business, a dispute that has grown as credit unionsproducts and services has broadened. Federally chartered creditunions, which are considered instrumentalities of the federalgovernment, are not subject to UBIT.