Form 1028 may be used by a farmers' cooperative to apply for recognition of exempt status under section 521. A farmers' cooperative, as defined in section 521, is an association of farmers, fruit growers, or persons with similar occupations that is organized and operated on a cooperative basis.
Send the completed application, all required information, and
If an agent or attorney will represent the organization, you must
file a power of attorney, specifically authorizing the representative
to act in person or by correspondence. Send the power of attorney with
the application when you file it. Use
Every attachment should state that it relates to Form 1028 and
identify the applicable part and line item number. The attachments
should also show the organization's name, address, and employer
identification number (EIN), and be on 8
In addition to the required documents and statements, include any additional information citing court decisions, rulings, opinions, etc., that may help to speed the processing of the application. Generally, attachments in the form of tape recordings are not accepted unless accompanied by a transcript.
An organization that is recognized as exempt from income tax under
section 521 must file an annual return on
An organization will
The Internal Revenue Service is required to collect a fee from any organization seeking an IRS determination of its exempt status as an organization described in section 521. A fee also applies to any exempt organization's request for a private letter ruling.
The nonrefundable fee must be submitted with the application or ruling request. Otherwise, the request will be returned without any action being taken on it.
The fees are shown in Form 8718, which is used to transmit both the appropriate fee and the application or ruling request.
Enter the organization's name as it appears in its organizing documents, including amendments. If the organization will be operated under another name, show that name in parentheses.
If the organization does not have an EIN, it should apply for one
using applied for
on line 1b, and attach a statement giving the date of the application
and office where it was filed.
One of the basic requirements for exemption is that the
organization be organized
for one or more exempt purposes. If
the organization does not have an organizing instrument, it will not
qualify for exempt status.
None of the documents submitted in support of this application, including organizational documents, will be returned.
Instead of the originals, submit conformed
copies of these
documents. A conformed
copy is one that agrees with the
original document and all of its amendments. If the copies are not
signed, they must be accompanied by a declaration signed by an officer
authorized to sign for the organization, certifying that they are
complete and accurate copies of the original documents.
Chemically or photographically reproduced copies of articles of incorporation showing the certification of an appropriate government official need not be accompanied by a declaration.
The information requested on lines 17 through 19 must be completed for the current year and each of the 3 immediately preceding years (or for the time the organization has existed if less than 4 years). The requested information for the current year must cover the period beginning on the first day of your organization's established annual accounting period and ending on any day which is within 60 days of the date of the application. If the date of the application is less than 60 days after the first day of the current accounting period, no information is required for the current year. Requested information is required for the 3 preceding years regardless of the current year requirement. Please note that if no information is required for the current year, the preceding year's information period can end on any day which is within 60 days of the date of the application.
The term producer
means an individual or corporation engaged
in farming as a business receiving income based on farm production
rather than fixed compensation. For example, a corporation leases its
land to a tenant farmer who agrees to pay a rental fee based on a
percentage of the farm crops produced. Both the landowner and the
tenant farmer qualify as producers.
Current and active
producers are patrons of a cooperative
who market more than 50% of their products or purchase more than 50%
of their supplies and equipment through the cooperative during the
cooperative's tax year.
The statement of receipts and expenditures and the balance sheets must be completed for the current year and each of the 3 immediately preceding years (or for the time the organization has existed if less than 4 years). We may request financial data for more than 4 years if circumstances warrant. All financial information for the current year must cover the period beginning on the first day of your organization's established annual accounting period and ending on any day which is within 60 days of the date of the application. If the date of the application is less than 60 days after the first day of the current accounting period, no financial information is required for the current year. Financial information is required for the 3 preceding years regardless of the current year requirements. Please note that if no financial information is required for the current year, the preceding year's financial information can end on any day which is within 60 days of the date of the application.
You may reproduce page 4 of the form and complete the financial data for each required year. Attach the financial data for all required years to the application.
The statements should be consistent with the method of accounting the organization uses in maintaining its books and records.
Include per-unit retain allocations paid to patrons in money, qualified written notices of allocation, or other property (except nonqualified per-unit retain certificates) and the amount paid to patrons in money or other property (except per-unit retain certificates) to redeem nonqualified per-unit retain certificates. (See sections 1382 and 1388.)
In the attached schedule for other expenditures, include a
breakdown for nonpatronage distributions paid as dividends on capital
stock and nonpatronage distributions made on a patronage basis. This
breakdown should include only distributions of earnings derived from
business done for the United States Government or any of its agencies
or income from sources other than patronage, but only to the extent
such amounts are paid in the same manner provided for patronage
dividends below. The term income from sources other than patronage
means incidental income derived from sources not directly related to
the marketing, purchasing, or service activities of the cooperative
association. For example, income derived from the lease of premises,
from investment in securities, or from the sale or exchange of capital
assets constitutes income from sources other than patronage.
Also include in the schedule the total amount of per-unit retain allocations other than those reflected in cost of sales on line 3b and the total amount of written notices of allocation other than those reflected on line 16. (See sections 1382 and 1388.)
In the attached schedule, show the amount of patronage dividends paid to patrons in money, qualified written notices of allocation, or other property (except non-qualified written notices of allocation) and the amount paid to patrons in money or other property (except written notices of allocation) to redeem nonqualified written notices of allocation. (See sections 1382 and 1388 and the related regulations.)
We ask for the information on this form to carry out the Internal Revenue laws of the United States. If you want your organization to be recognized as tax-exempt by the IRS, you are required to give us this information. We need it to determine whether the organization meets the legal requirements for tax-exempt status.
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return information are confidential, as required by section 6103.
The time needed to complete and file this form will vary depending on individual circumstances. The estimated average time is:
If you have comments concerning the accuracy of these time
estimates or suggestions for making this form simpler, we would be
happy to hear from you. You can write to the Tax Forms Committee,
Western Area Distribution Center, Rancho Cordova, CA 95743–0001.