Tippets Tapped As New North Island CU CEO
SAN DIEGO-North Island Credit Union has hired former American Airlines FCU CEO John Tippets to lead the $1.47-billion NICU. Tippets came out of retirement to take the reins at North Island, replacing Michael Maslak, who retired in January. The CU board said it wanted to turn to a seasoned CU veteran to guide North Island during the turbulent economy.
Court Ruling Should Settle UBIT Debate For CUs
WASHINGTON-A law firm specializing in tax law has said it believes a recent court decision represent "substantial authority" for the position that credit life and disability insurance and GAP coverage at CUs are exempt from the Unrelated Business Income Tax.
"This means that a credit union would not be subject to a civil tax penalty if it filed a UBIT tax return (Form 990-T) treating income from credit insurance and GAP as exempt from UBIT," according to an opinion issued by Foley & Lardner LLP, a Madison, Wis.-based law firm that specializes in tax law. "Also, professional tax return prepares can prepare Form 990-T for a credit union treating credit insurance and GAP as exempt from UBIT without risking the separate civil tax penalty that can be imposed on preparers."
The firm's opinion, which was sought by the UBIT Steering Committee on behalf of credit unions, was based on the result of Community First CU's suit against the IRS, in which is won a full refund of UBIT taxes in a federal jury trial in Green Bay, Wis. In that case, the jury found that the sale of credit life insurance, credit disability insurance and GAP products to members were "substantially related" to the credit union's tax-exempt purposes and therefore were not subject to UBIT.
