Azura Credit Union

“The credit union maintains escrow accounts for insurance and property taxes related to member real estate loans.”

“The credit union is exempt from most federal, state, and local taxes under the provisions of the internal revenue code and state tax laws. Fasb asc 740-10-25, "income taxes, overall recognition" clarifies accounting for uncertain income taxes reported in the financial statements. The interpretation provides criteria for assessment of individual tax positions and a process for recognition and measurement of uncertain tax positions. Tax positions are evaluated on whether they meet the "more likely than not" standard for sustainability upon examination by tax authorities. The credit union is a state-chartered credit union as defined in internal revenue code (irc) section 501(c)(14). As such, the credit union is exempt from federal taxation of income derived from the performance of activities directly related to its exempt purposes. However, irc section 511 imposes a tax on the unrelated business income (ubi) derived by state-chartered credit unions. Court decisons have been rendered in response to legal challenges from individual credit unions against the irs, which specified the revenue sources subject to ubit. The two court rulings rejected the irs's analysis of how ubit should apply to credit unions by determining that revenue sources listed by the irs were substantially related to the credit union's tax emempt purpose, and therefore, not subject to ubit. Credit union management accepts the legal decisions rendered by the courts and determined that the credit union has limited income derived from non-exempt sources. The credit union has filed the 990 and 990-t returns up to and including 2012, and intends to file the 2013 990 and 990-t tax returns under the same approach. With few exeptions, the credit union is no longer subject to u.s. Federal or state and local income tax examinations by tax authorities for years before 2010.”