Make sure the application is complete. Please note...
1. |
Complete all parts of the application.
|
2. |
Show the employer identification number
(EIN): |
|
a. If the organization has one,
put it on line 1b. |
|
b. If the organization doesn't
have an EIN, obtain it by telephone (see the Specific
Instructions for Part I, line 1b). |
3. |
Enclose financial statements (see
the Specific Instructions for Part IV): |
|
a. Current year (must include the
period that is within 60 days of the application's filing
date) and 3 preceding years. |
|
b. Detailed breakdown of receipts
and expenditures - no lump sums. |
4. |
Include a conformed copy of the complete
organizing instrument and a copy of the bylaws. |
|
a. An organizing instrument means:
|
|
(1) Articles of incorporation |
|
a) Signed by the incorporators,
and |
|
b) Signed by an appropriate government
official, or |
|
(2) Constitution or articles of
association (signed). |
|
b. A conformed copy is one that
agrees with the original and all amendments to it. |
5. |
Enclose Form
8718 and appropriate user fee (See General Instruction
F). |
6. |
Have the application signed by one
of the following: |
|
a. An officer, |
|
b. A director, or |
|
c. A person having power of attorney
(submit the power of attorney too). |
7. |
Give the name and phone number of someone
we can call during normal business hours if we need additional
information (Part I, line 3). |
General Instructions
Keep a copy of the completed application form in your
permanent records.
A. Who May Use This Form
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.
B. Where To File
Send the completed application, all required information, and
Form 8718, User Fee for Exempt Organization Determination
Letter Request, with the appropriate user's fee, to the address shown
in the Instructions to Form 8718. Soon after we receive the
application, you will be advised of the Internal Revenue Service's
determination and of the annual returns that the organization will be
required to file.
C. Power of Attorney
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 Form 2848, Power of
Attorney and Declaration of Representative, or Form 8821,
Tax Information Authorization, for this purpose.
D. Attachments
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'' x 11''
paper.
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.
E. Annual Return
An organization that is recognized as exempt from income tax under
section 521 must file an annual return on Form 990-C,
Farmers' Cooperative Association Income Tax Return.
An organization will not be considered exempt, even
though it operates within the provisions of sections 521 and 1381
through 1388, unless it files this application or has previously
received a ruling recognizing its exemption under section 521 of the
Internal Revenue Code of 1986 or corresponding provisions of prior
law.
F. User Fees for Exempt Organization Ruling and Determination Requests
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.
Specific Instructions
Part I - Identification
Line 1a - Organization's Name.
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.
Line 1b - Employer Identification Number (EIN).
If the organization does not have an EIN, it should apply for one
using Form SS-4, Application for Employer Identification
Number. Form SS-4 can be obtained at Social Security Administration
(SSA) offices, or by calling 1-800-TAX-FORM. Form SS-4 has information
on how to apply for an EIN by mail or by telephone. If the
organization has previously applied for a number, enter applied for
on line 1b, and attach a statement giving the date of the application
and office where it was filed. Do not apply more than once
for an EIN.
Part II - Type of Entity and Organizational Documents
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.
Part III - Activities and Operational Information
Lines 17 through 19.
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.
Definitions.
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.
Part IV - Financial Data
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.
Line 3b - Cost of Goods Sold.
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.)
Line 15 - Other Expenditures.
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.)
Line 16 - Patronage Dividends.
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.)
Paperwork Reduction Act Notice
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:
Recordkeeping |
44 hr., 14 min. |
Learning about the law or the form |
1 hr., 44 min. |
Preparing the form |
4 hr., 23 min. |
Copying, assembling, and sending the form to the IRS |
32 min. |
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.
Do not send the tax form to this address. Instead, see
Where To File on page 1.
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