Tax News

CCH (cch.taxgroup.com) reports:

  A tax-exempt credit union's sales of insurance products were substantially related to its tax-exempt purpose of encouraging thrift. Despite the government's expert witness' opinion that the insurance products were too expensive given their relatively low loss-ratios and that sale of the insurance products enriched lending institutions and insurers at the expense of consumers, the jury's conclusion to the contrary was not irrational. The jury could have interpreted "thrift" more broadly and concluded that, even if other kinds of insurance could accomplish the same goals at a lower price, members could nevertheless be engaged in thrift when obtaining insurance against possible losses. Moreover, considering the relatively low actual cost of the insurance products, the government's loss-ratio calculations and reverse competition claims were inconsequential.

Community First Credit Union, DC Wis., 2009-2 USTC ¶50,496

Other References:

 
Code Sec. 513

  CCH Reference - 2009FED ¶22,846.37

  Tax Research Consultant

  CCH Reference - TRC EXEMPT: 12,202
CCH Reference - TRC EXEMPT: 15,056.05