Opinion ID: 411167
Heading Depth: 3
Heading Rank: 3

Heading: Data Processing Activities

Text: 65 Finally, the League asserts that by providing credit unions with data processing services it fosters the growth of the credit union movement and thereby contributes importantly to its exempt function. The district court held that the League's data processing services were not substantially related to its exempt function because the benefits flowing from those services were restricted to the participating credit unions. This holding must be affirmed. It appears from the record that some but not all LCUL members utilize the League's data processing services. New and small credit unions have no need for electronic accounting systems and generally use hand-posting methods. Credit unions large enough to support an in-house processing system generally do so. Thus, as with debt collection, only certain members of the League derive the benefits of the data processing services, and these benefits accrue to them as individual participants rather than as League members. We note further that the League charges the credit unions according to the amount of use they make of the program. When each member contributes in proportion to what he receives, it is a strong indication that the benefits received are not ... 'inherently group benefits.'  Evanston-North Shore Board of Realtors v. United States, 320 F.2d 375, 379 (Ct.Cl.1963). Because the data processing program operates for the primary benefit of participating credit unions, we affirm the district court's holding that it is not substantially related to LCUL's exempt function for purposes of section 513(a). See also Rev.Rul. 81-75, 1981-1 C.B. 356 (income received by tax-exempt business league from language translation service is unrelated business taxable income); Rev.Rul. 56-466, 1957-2 C.B. 311 (income received by tax-exempt organization from sale of supplies and equipment to members is unrelated business taxable income).