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).   Enter the organization's EIN. If the organization does not have an EIN, it must apply for one. An EIN can be applied for:
  • Online—Click on the EIN link at www.irs.gov/businesses/small. The EIN is issued immediately once the application information is validated.

  • By telephone at 1-800-829-4933 from 8:00 a.m. to 8:00 p.m. in the local time zone.

  • By mailing or faxing Form SS-4, Application for Employer Identification Number.

  If the organization has not received its EIN by the time the return is due, enter “Applied for” in the space for the EIN. For more details, see Pub. 583.

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.)


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