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PAGER/SGML                                               Fileid:               I1028.SGM                                       (13-Sep-2006)                                     (Init. & date)

Page 1 of 2                       Instructions for Form 1028                                                                                                                     8:17 - 13-SEP-2006

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                                                                                                                                                                                 Department of the Treasury
                                                                                                                                                                                 Internal Revenue Service
Instructions for Form 1028

(Rev. September 2006)
Application for Recognition of Exemption Under Section 521 of the Internal
Revenue Code

Section references are to the Internal                                                                      representative to act in person or by                   ruling recognizing its exemption under
Revenue Code unless otherwise noted.                                                                        correspondence. Send the power of                       section 521 of the Internal Revenue Code
                                                                                                            attorney with the application when you file             of 1986 or corresponding provisions of
                                                                                                            it. Use Form 2848, Power of Attorney and                prior law.
General Instructions                                                                                        Declaration of Representative, or Form

Keepapplicationa copyformof thein yourcompletedpermanent                                                    this8821,Taxpurpose.Information Authorization, for      F. User Fees for Exempt
records.                                                                                                                                                            Organization Ruling and
                                                                                                            D. Attachments                                          Determination Requests
A. Who May Use This Form                                                                                    Every attachment should state that it                   The Internal Revenue Service is required
Form 1028 may be used by a farmers’                                                                         relates to Form 1028 and identify the                   to collect a fee from any organization
cooperative to apply for recognition of                                                                     applicable part and line item number. The               seeking an IRS determination of its
exempt status under section 521. A                                                                          attachments should also show the                        exempt status as an organization
farmers’ cooperative, as defined in                                                                         organization’s name, address, and                       described in section 521. A fee also
section 521, is an association of farmers,                                                                  employer identification number (EIN), and               applies to any exempt organization’s
fruit growers, or persons with similar                                                                      be on 81/2’’ x 11’’ paper.                              request for a private letter ruling.
occupations that is organized and
operated on a cooperative basis.                                                                            In addition to the required documents                       The nonrefundable fee must be
                                                                                                            and statements, include any additional                  submitted with the application or ruling
                                                                                                            information citing court decisions, rulings,            request. Otherwise, the request will be
B. Where To File                                                                                            opinions, etc., that may help to speed the              returned without any action being taken
Send the completed application, all                                                                         processing of the application. Generally,               on it.
required information, and Form 8718,                                                                        attachments in the form of tape
User Fee for Exempt Organization                                                                            recordings are not accepted unless                          The fees are shown in Form 8718,
Determination Letter Request, with the                                                                      accompanied by a transcript.                            which is used to transmit both the
appropriate user’s fee, to the address                                                                                                                              appropriate fee and the application or
shown in the Instructions to Form 8718.                                                                                                                             ruling request. User fees are subject to
Soon after we receive the application, you                                                                  E. Annual Return                                        change. Check our website at www.irs.
will be advised of the Internal Revenue                                                                     An organization that is recognized as                   gov and type “User Fee” in the keyword
Service’s determination and of the annual                                                                   exempt from income tax under section                    box, or call Customer Account Services at
returns that the organization will be                                                                       521 must file an annual return on Form                  1-877-829-5500 for current information.
required to file.                                                                                           1120-C, U.S. Income Tax Return for
                                                                                                            Cooperative Associations. An
                                                                                                            organization will not be considered
C. Power of Attorney                                                                                        exempt, even though it operates within                  Specific Instructions
If an agent or attorney will represent the                                                                  the provisions of sections 521 and 1381
organization, you must file a power of                                                                      through 1388, unless it files this                      Part I—Identification
attorney, specifically authorizing the                                                                      application or has previously received a
                                                                                                                                                                    Line 1a—Organization’s Name.                           Enter
Make sure the application is complete. Remember to...                                                                                                               the organization’s name as it appears in
                                                                                                                                                                    its organizing documents, including
1.    Complete all parts of the application.                                                                                                                        amendments. If the organization will be
2.    Show the employer identification number (EIN):                                                                                                                operated under another name, show that
      a. If the organization has one, put it on line 1b.                                                                                                            name in parentheses.
      b. If the organization doesn’t have an EIN, you must apply for one (see the Specific
         Instructions for Part I, line 1b).                                                                                                                         Line 1b—Employer Identification
3.    Enclose financial statements (see the Specific Instructions for Part IV):                                                                                     Number (EIN).               Enter the organization’s
      a. Current year (must include the period that is within 60 days of the application’s filing                                                                   EIN. If the organization does not have an
         date) and 3 preceding years.                                                                                                                               EIN, it must apply for one. An EIN can be
      b. Detailed breakdown of receipts and expenditures — no lump sums.                                                                                            applied for:
4.    Include a conformed copy of the complete organizing instrument and a copy of the                                                                              •   Online—Click on the EIN link at www.
      bylaws.                                                                                                                                                       irs.gov/businesses/small. The EIN is
      a. An organizing instrument means:                                                                                                                            issued immediately once the application
         1)      Articles of incorporation                                                                                                                          information is validated.

         2)      b)Constitutiona)SignedSigned bybyoftheanarticlesappropriateincorporators,of associationgovernmentand (signed).official, or                         8:00• Bya.m.telephoneto 8:00atp.m.1-800-829-4933in the local timefrom
      b. A conformed copy is one that agrees with the original and all amendments to it.                                                                            zone.
5.    Enclose Form 8718 and appropriate user fee (see General Instruction F).                                                                                       •   By mailing or faxing Form SS-4,
6.    Have the application signed by one of the following:                                                                                                          Application for Employer Identification
      a. An officer,                                                                                                                                                Number.
      b. A director, or                                                                                                                                                 If the organization has not received its
      c. A person having power of attorney (submit the power of attorney too).                                                                                      EIN by the time the return is due, enter
7.    Givehourstheif wenameneedandadditionalphone numberinformationof someone(Part I,welinecan3).                                        call during normal business“Appliedmore details,for” inseethePub.space583.for the EIN. For
                                                                                                                                           Cat. No. 17139Y

Page 2 of 2                                                                     Instructions for Form 1028                                                                                                                                                                                                                                                                                                                                             8:17 - 13-SEP-2006

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Part II—Type of Entity and                                                                                                                                                                          purchase more than 50% of their supplies                                                                                                                                           lease of premises, from investment in
                                                                                                                                                                                                    and equipment through the cooperative                                                                                                                                              securities, or from the sale or exchange of
Organizational Documents                                                                                                                                                                            during the cooperative’s tax year.                                                                                                                                                 capital assets constitutes income from
One of the basic requirements for                                                                                                                                                                                                                                                                                                                                                      sources other than patronage.
exemption is that the organization be                                                                                                                                                               Part IV—Financial Data                                                                                                                                                               Also include in the schedule the total
“organized” for one or more exempt                                                                                                                                                                  The statement of receipts and                                                                                                                                                      amount of per-unit retain allocations other
purposes. If the organization does not                                                                                                                                                              expenditures and the balance sheets                                                                                                                                                than those reflected in cost of sales on
have an organizing instrument, it will not                                                                                                                                                          must be completed for the current year                                                                                                                                             line 3b and the total amount of written
qualify for exempt status.                                                                                                                                                                          and each of the 3 immediately preceding                                                                                                                                            notices of allocation other than those
  None of the documents submitted in                                                                                                                                                                years (or for the time the organization has                                                                                                                                        reflected on line 16. (See sections 1382
support of this application, including                                                                                                                                                              existed if less than 4 years). We may                                                                                                                                              and 1388.)
organizational documents, will be                                                                                                                                                                   request financial data for more than 4                                                                                                                                             Line 16—Patronage Dividends.                                                                                                                                                  In the
returned.                                                                                                                                                                                           years if circumstances warrant. All                                                                                                                                                attached schedule, show the amount of
  Instead of the originals, submit                                                                                                                                                                  financial information for the current year                                                                                                                                         patronage dividends paid to patrons in
“conformed” copies of these documents.                                                                                                                                                              must cover the period beginning on the                                                                                                                                             money, qualified written notices of
A “conformed” copy is one that agrees                                                                                                                                                               first day of your organization’s established                                                                                                                                       allocation, or other property (except
with the original document and all of its                                                                                                                                                           annual accounting period and ending on                                                                                                                                             non-qualified written notices of allocation)
amendments. If the copies are not signed,                                                                                                                                                           any day which is within 60 days of the                                                                                                                                             and the amount paid to patrons in money
they must be accompanied by a                                                                                                                                                                       date of the application. If the date of the                                                                                                                                        or other property (except written notices
declaration signed by an officer                                                                                                                                                                    application is less than 60 days after the                                                                                                                                         of allocation) to redeem nonqualified
authorized to sign for the organization,                                                                                                                                                            first day of the current accounting period,                                                                                                                                        written notices of allocation. (See sections
certifying that they are complete and                                                                                                                                                               no financial information is required for the                                                                                                                                       1382 and 1388 and the related
accurate copies of the original                                                                                                                                                                     current year. Financial information is                                                                                                                                             regulations.)
documents.                                                                                                                                                                                          required for the 3 preceding years
                                                                                                                                                                                                    regardless of the current year                                                                                                                                                     Paperwork Reduction Act Notice.                                                                                                                                                          We
  Chemically or photographically                                                                                                                                                                    requirements. Please note that if no                                                                                                                                               ask for the information on this form to
reproduced copies of articles of                                                                                                                                                                    financial information is required for the                                                                                                                                          carry out the Internal Revenue laws of the
incorporation showing the certification of                                                                                                                                                          current year, the preceding year’s                                                                                                                                                 United States. If you want your
an appropriate government official need                                                                                                                                                             financial information can end on any day                                                                                                                                           organization to be recognized as
not be accompanied by a declaration.                                                                                                                                                                which is within 60 days of the date of the                                                                                                                                         tax-exempt by the IRS, you are required
                                                                                                                                                                                                    application.                                                                                                                                                                       to give us this information. We need it to
Part III—Activities and                                                                                                                                                                                You may reproduce page 4 of the form                                                                                                                                            determine whether the organization
Operational Information                                                                                                                                                                             and complete the financial data for each                                                                                                                                           meets the legal requirements for

requestedcompletedforlessofLinesthethethan317timeimmediatelythrough4onforyears).thelinestheorganizationcurrent19.The17precedingthroughTherequestedyearinformationhas19andyearsexistedmusteach(orbeifwithrequiredandallorganizationrequiredTherecords.thestatementsmethodyear.yearsusesAttachoftoinaccountingshouldthemaintainingtheapplication.financialbe consistenttheitsdatabooksforinformationsubjecttax-exempttocontrolunlessaYouformthenumber.aretoortheformnotrequestedstatus.itsPaperworkinstructionsrequireddisplaysBooksonortoaReductionarecordsvalidprovidemustformOMBbethatrelatingtheActis
information for the current year mustcover the period beginning on the first day                                                                                                                    Line 3b—Cost of Goods Sold.per-unit retain allocations paid to patronsInclude                                                                                                      retained as long as their contents maybecome material in the administration of
of your organization’s established annual                                                                                                                                                           in money, qualified written notices of                                                                                                                                             any Internal Revenue law. Generally, tax
accounting period and ending on any day                                                                                                                                                             allocation, or other property (except                                                                                                                                              returns and return information are
which is within 60 days of the date of the                                                                                                                                                          nonqualified per-unit retain certificates)                                                                                                                                         confidential, as required by section 6103.
application. If the date of the application is                                                                                                                                                      and the amount paid to patrons in money
less than 60 days after the first day of the                                                                                                                                                        or other property (except per-unit retain                                                                                                                                            The time needed to complete and file
current accounting period, no information                                                                                                                                                           certificates) to redeem nonqualified                                                                                                                                               this form will vary depending on individual
is required for the current year.                                                                                                                                                                   per-unit retain certificates. (See sections                                                                                                                                        circumstances. The estimated average
Requested information is required for the                                                                                                                                                           1382 and 1388.)                                                                                                                                                                    time is:

current3currentthatprecedingif noyear,yearinformationyearsrequirement.the precedingregardlessis requiredPleaseyear’sof forthenotethe                                                                distributionsattachedLineinclude15—OtheraschedulebreakdownpaidExpenditures.asfordividendsforothernonpatronageexpenditures,onIncapitalthe                                           LearningPreparingtheRecordkeepingformabout..............the formthe.........law.......or                                                           44  1  4  hr.,hr.,hr.,442314min.min.min.
information period can end on any day                                                                                                                                                               stock and nonpatronage distributions                                                                                                                                               Copying, assembling, and
which is within 60 days of the date of the                                                                                                                                                          made on a patronage basis. This                                                                                                                                                    sending the form to the IRS                                                                                                                                                     32 min.
application.                                                                                                                                                                                        breakdown should include only
Definitions.                                      The term “producer” means                                                                                                                         distributions of earnings derived from                                                                                                                                               If you have comments concerning the
an individual or corporation engaged in                                                                                                                                                             business done for the United States                                                                                                                                                accuracy of these time estimates or
farming as a business receiving income                                                                                                                                                              Government or any of its agencies or                                                                                                                                               suggestions for making this form simpler,
based on farm production rather than                                                                                                                                                                income from sources other than                                                                                                                                                     we would be happy to hear from you. You
fixed compensation. For example, a                                                                                                                                                                  patronage, but only to the extent such                                                                                                                                             can write to the Internal Revenue Service,
corporation leases its land to a tenant                                                                                                                                                             amounts are paid in the same manner                                                                                                                                                Tax Products Coordinating Committee,
farmer who agrees to pay a rental fee                                                                                                                                                               provided for patronage dividends below.                                                                                                                                            SE:W:CAR:MP:T:T:SP, 1111 Constitution
based on a percentage of the farm crops                                                                                                                                                             The term “income from sources other                                                                                                                                                Ave. NW, IR-6406, Washington, DC
produced. Both the landowner and the                                                                                                                                                                than patronage” means incidental income                                                                                                                                            20224. Do not send the tax form to this
tenant farmer qualify as producers.                                                                                                                                                                 derived from sources not directly related                                                                                                                                          address. Instead, see Where To File on
  “Current and active” producers are                                                                                                                                                                to the marketing, purchasing, or service                                                                                                                                           page 1.
patrons of a cooperative who market                                                                                                                                                                 activities of the cooperative association.
more than 50% of their products or                                                                                                                                                                  For example, income derived from the

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