Laborers' International Union of North America - Page 8

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               Respondent argues “petitioner’s collection of income from              
          the associate membership of Mail Handlers constitutes a trade or            
          business.”  Respondent’s argument is flawed.  First, as a factual           
          matter, petitioner does not collect any income from the associate           
          membership of Mail Handlers.  Mail Handlers collects dues from              
          its associate members.  It is irrelevant to the issue before us             
          that receipt of that income by Mail Handlers may well be UBTI to            
          Mail Handlers.  Mail Handlers is not before the Court.  Second,             
          other than the services petitioner provides its members and                 
          affiliated unions in furtherance of its exempt purposes,                    
          petitioner provides no goods or services for a profit and                   
          therefore cannot be in an unrelated trade or business.  Although            
          respondent correctly observes that courts have found that the               
          collection of associate dues in exchange for access to a health             
          insurance program constitutes a trade or business, see, e.g., Am.           
          Postal Workers Union v. United States, 925 F.2d 480, 483 (D.C.              
          Cir. 1991), petitioner does not provide access to the Mail                  
          Handlers’ health plan.                                                      
               Respondent further argues:                                             
               In substance, the income petitioner receives is a                      
               portion of the associate member dues retained by Mail                  
               Handlers.  The income may not have come to petitioner                  
               directly from the associate members, but each dollar                   
               petitioner collects from Mail Handlers is generated                    
               from the unrelated trade or business activity of                       
               providing access to health insurance.  This is the same                
               unrelated trade or business activity that generates                    
               UBTI to Mail Handlers and its Local Unions.  The                       
               portion of associate member dues that is forwarded to                  
               petitioner, therefore, should retain its character as                  
               UBTI when it is passed along to petitioner.  The                       
               associate member dues paid to Mail Handlers and then to                

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