GREENWOOD VILLAGE, Colo. (2/2/11)--Bellco CU Tuesday received three checks totaling $291,691.62 from the Internal Revenue Service (IRS), the result of the Greenwood Village, Colo.-based credit union winning its challenge to the IRS's policy toward unrelated business income tax (UBIT) and its application to credit unions. Bellco CU CEO Doug Ferraro told News Now the three checks were "a full refund of the three years in which we sued over" the IRS's policy. He noted his law firm received the checks yesterday. "It nearly brought tears to the eyes of one staff member who worked on this case for so long," Ferraro said. "In the end, credit unions prevailed on every major issue in the lawsuit. It was a decisive blow to the IRS position on various elements of UBIT for state-chartered credit unions, and serves as a template for organizing insurance and investment activities in a way to ensure they are not subject to UBIT," he said. Judge Christine M. Arguello of the U.S. District Court of Colorado in Denver ruled in November 2009 that investment and insurance products sold by Bellco to members, including credit life and disability insurance and some other products, stocks, bonds, mutual funds and annuities, were "substantially related" to Bellco's tax-exempt purposes, and therefore the income from those activities was, under the law, exempt from UBIT (News Now Oct. 20, 2010). In October 2010, the U.S. Department of Justice abandoned its plans to appeal that ruling, prompting Credit Union National Association (CUNA) President/CEO Bill Cheney to call it "fantastic news because it means the government did not see enough merit in its own position to push it further in the courts." "The UBIT Steering Committee did a terrific job in finding an outstanding firm who fought hard for credit unions," Ferraro told News Now. The credit union was represented in the lawsuit by law firm Foley & Lardner LLP and lead attorney Michael M. Conway. Ferraro thanked the UBIT Steering committee--comprised of CUNA, the American Association of Credit Union Leagues, CUNA Mutual Group and the National Association of State Credit Union Supervisors (NASCUS)--"for their leadership in fighting this much-needed battle." The case was the second time within a year that a U.S. District Court had upheld credit unions' challenges to UBIT rules. In 2009, Community First CU, Appleton, Wis., was ruled exempt from UBIT on income from credit life insurance, credit disability insurance and GAP coverage (News Now April 6, 2010).