Applying for Exemption/Misc. Determination: Sample Questions
Voluntary Employees' Beneficiary Association
Applications for exemption and miscellaneous determination requests are assigned to Exempt Organizations specialists for review. If additional information is necessary to make a determination, a specialist will contact the organization for the information. Here’s a list of questions that might be asked on this topic.
- A VEBA’s corporate charter, articles of association, trust instrument, or other written instrument by which it was created, may not provide that the VEBA’s assets will be distributed to its members’ contributing employers on dissolution. Your [Insert: corporate charter, articles of incorporation, trust instrument, or other instrument by which it was created] provides that your assets will be distributed to the members' contributing employers on dissolution. Please amend your [corporate charter, articles of incorporation, trust instrument, or written instrument by which you were created] to delete this provision.
- You submitted your Form 1024 more than 27 months from the end of the month in which you were created. Your VEBA may receive an adverse letter limiting the effective date of its exempt status to the date its application was received, unless you request and are granted exempt status retroactive to the date you were organized. To request retroactive exemption, please refer to the Form 1024 Instructions.
- Membership in a VEBA must be voluntary. Please describe how your organization satisfies this requirement.
- A VEBA must be controlled by its membership, an independent trustee or trustees, or trustees or other fiduciaries at least some of whom are designated by, or on behalf of, the membership. Please describe how your organization satisfies this requirement.
- Criteria for eligibility for membership may not be selected or administered in a manner which limits membership or benefits to officers, shareholders, or highly compensation employees of an employer contributing to or otherwise funding the VEBA. Please describe how your organization satisfies this requirement.
- VEBA members must share an employment-related common bond. Please describe how your organization satisfies this requirement.
- Generally, members of a VEBA must be employees. A VEBA is considered to be comprised of employees if 90 percent of the total membership on one day of each quarter of the VEBA’s taxable year consists of employees. Please describe how your organization satisfies this requirement.
- A VEBA must provide for the payment of life, sick, accident, or other benefits which are similar to life, sick or accident benefits. Please describe how your organization satisfies this requirement and provide any plan documents or insurance contracts relating to benefits provided.
- VEBA benefits may only be provided to members of the VEBA, members’ dependents, and members’ designated beneficiaries. For purposes of IRC 501(c)(9), “dependent” means the member’s spouse, any child of the member or member’s spouse who is a minor or a student (within the meaning of IRC 152(f)(2)); any other minor child residing with the member, or any other individual who the association, relying on information furnished to it by the member, in good faith believes is a person described in IRC 152(a). For purposes of providing for the payment of sick and accident benefits to members of the VEBA and their dependents, the term “dependent” includes any individual who is a member’s child (as defined in IRC 152(f)(1)) and who has not attained age 27 as of the end of the calendar year. A designated beneficiary can only receive life benefits and other benefits that are similar to life benefits from a VEBA. Please describe how your organization satisfies this requirement.
[Instruction: A VEBA which is part of a plan maintained pursuant to a collective bargaining agreement does not have to meet the nondiscrimination requirements (see #11).]
- A VEBA may not discriminate in favor of highly compensated employees. Please describe how your organization satisfies the nondiscrimination requirements.
- You have indicated that your VEBA is part of a plan maintained pursuant to a collective bargaining agreement. Please provide a copy of the collective bargaining agreement.
See the complete list of Applying for Exemption/Miscellaneous Determination Sample Questions by topic.