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Washington
Judge may not order trial in Bellco UBIT case
WASHINGTON (9/4/09)--Judge Christine Arguello asked both parties in the Bellco Credit Union V. U.S. unrelated business income tax case to reconsider their requests for a jury trial. During oral arguments late last week in Denver, Arguello asked several questions of both sides during a two-hour session. The oral argument portion of the trial followed the filing of separate motions for summary judgment by both Bellco and the U.S. Department of Justice. Bellco has challenged the assessment of unrelated business income tax (UBIT) on three of its products, and is seeking a refund of $199,293 that was paid on products such as accidental death and disability insurance (AD&D), credit life and disability insurance, and financial services such as investments in 2000, 2001 and 2003, plus statutory interest. One disputed issue is whether the sale of credit insurance and investment products are substantially related to the granting of loans and the promotion of thrift, and whether income from the sale of AD&D qualified as a royalty not subject to UBIT. The government has asserted that neither credit insurance nor financial services were related to the exercise or performance of Bellco's tax-exempt purposes. The government has also sought to exclude income from the sale of AD&D policies from being counted as royalty income. Arguello said she may ask for further briefings on the issues surrounding the case before making her final decision. The trial, if approved, would take place in December.


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