FORM 1028 AND INSTRUCTIONS 
(Rev. 9-2006)
Application for Recognition of Exemption
Catalog Number: 17138N

Provided by the IRS AMC
(Alternative Media Center)

Contract No. 645-302/34899
In One Volume
Pages 1-2
TABLE OF CONTENTS
Form 1028: Application for Recognition of Exemption 1 
Part I Identification 1 
Part II Type of Entity and Organizational Documents 1 
Part III Activities and Operational Information 1 
Please Sign Here 1 
Part IV Financial Data 4 
Instructions for Form 1028 1 
General Instructions 1 
A. Who May Use This Form 1 
B. Where To File 1 
C. Power of Attorney 1 
D. Attachments 1 
E. Annual Return 1 
F. User Fees for Exempt Organization Ruling and Determination Requests 1 
Specific Instructions 1 
Part I--Identification 1 
Part II--Type of Entity and Organizational Documents 2 
Part III--Activities and Operational Information 2 
Part IV--Financial Data 2 
<Page 1>
Application for Recognition of ExemptionForm 1028(Rev. September 2006)
Department of the Treasury
Internal Revenue Service
OMB No. 1545-0058
Under Section 521 of the Internal Revenue Code
For the use of farmers', fruit growers', or like associations applying for recognition of exemption as cooperatives.
See separate Instructions.
If your organization does not have an organizing document, do not file this application. Every organization must furnish all the information specified on the form and in the instructions. An attachment may be used if more space is needed for any item. If the required information and appropriate documents are not submitted along with Form 8718 (with payment of the appropriate user fee), the application may be returned to you.
Part I Identification
1a. Full name of organization (See instructions.): ----
1b. Employer identification number (See instructions.): ----
2a. Number, street, and room or suite no. (or P.O. box number if mail is not delivered to street address): ----
2b. City or town, county, state, and ZIP code: ----
3. Name and telephone number (including area code) of person to be contacted during business hours: ----
4. Date incorporated or formed: ----
5. Month the annual accounting period ends: ----
6a. Has the organization filed Federal income tax returns?
-- Yes
-- No
6b. If "Yes," state the form numbers, years filed, and Internal Revenue office where filed: ----
Part II Type of Entity and Organizational Documents
(See instructions.)
Check the applicable entity box below and attach a conformed copy of the organizing and operational documents listed.
-- Corporation--Articles of Incorporation, bylaws
-- Other--Constitution or Articles of Association, bylaws
Part III Activities and Operational Information
1. Number of shares of each class of capital stock currently outstanding, if any, the value of the consideration for which issued, and the rate of dividend paid:
a. Preferred stock (voting):
Shares: ----
Amount: ----
Rate of Dividend: ----
b. Preferred stock (nonvoting):
Shares: ----
Amount: ----
Rate of Dividend: ----
c. Common stock (voting):
Shares: ----
Amount: ----
Rate of Dividend: ----
d. Common stock (nonvoting):
Shares: ----
Amount: ----
Rate of Dividend: ----
2. Number of shares of capital stock (other than nonvoting preferred) owned by:
a. Producers: ----
b. Nonproducers: ----
c. Current and active producers: ----
d. Total number of shares--Add lines 2a and 2b: ----
e. Percentage owned by current and active producers--Divide line 2c by line 2d: ----% 
3. What provision is made for retiring the voting stock held by a nonproducer? ----
4. Describe who is accorded voting rights in the cooperative and how many votes one person may have. If a person may be entitled to more than one vote, explain in detail how voting rights are acquired.: ----
5. Legal rate of interest in the state where the association is located: ----
Please Sign Here
Under penalties of perjury, I declare that I am authorized to sign this application on behalf of the above organization; and I have examined this application, including the accompanying statements, and to the best of my knowledge and belief it is true, correct, and complete. (See General Instruction C.)
(Signature): ----
(Title or authority of signer): ----
(Date): ----
For Paperwork Reduction Act Notice, see page 2 of the separate instructions.
Cat. No. 17138N
<Page 2>
6. If the association issues any nonvoting preferred stock, explain whether the owners, upon dissolution or liquidation, may participate in the profits of the association beyond fixed dividends. ----
7a. Does state law require the accumulation and maintenance of reserves?
-- Yes
-- No
7b. If "Yes," state the names and purposes of the reserves and enter the amount of each: ----
8a. Does the association maintain or plan to maintain any reserve or reserves other than those required by state law?
-- Yes
-- No
8b. If "Yes," state the names and purposes of the reserves and enter the amount of each: ----
9. Does the association deal or plan to deal with both members and nonmembers?
-- Yes
-- No
10a. Does the association pay or plan to pay patronage dividends?
-- Yes
-- No
10b. If "Yes," are they paid or will they be paid to all patrons, both member and nonmember, on the same basis?
-- Yes
-- No
11a. Is the allocation of patronage dividends based on an obligation in existence before the cooperative received the amounts allocated?
-- Yes
-- No
11b. If "Yes," is the obligation in:
-- Organizing document (specify): ----
-- Bylaws
12. Explain all of the activities in which the association is or will be engaged.: ----
13. Explain how distribution is or will be made of the proceeds of products marketed for members and nonmembers. Also, if the organization operates on a basis of allocated units (i.e., functional, departmental, etc.), explain how losses are or will be treated.: ----
14. Explain how the association charges for supplies and equipment bought for members and nonmembers.: ----
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15. Explain the requirements for membership in the association.: ----
16. Federated cooperatives only:
a. Are all the association's member cooperatives exempt under section 521?:
-- Yes
-- No
b. If "No," do the nonexempt member cooperatives have the same annual accounting period as the association's?:
-- Yes
-- No
c. If "No," to 16b, check the method below that the association used, or will use, to provide a common or comparable unit of time for analyzing and evaluating its operations and those of its members.
Note: Methods listed below do not apply to the filing of returns or the manner in which operating results are reported by a federated cooperative and its members.
1. -- Method 1--The association uses the operations of members for those months that correspond to the months that make up its tax year.
2. -- Method 2--The association uses the tax years of members that end within its tax year.
3. -- Method other than 1 or 2 above (explain): ----
* If it is necessary to own one or more shares of stock in order to become a member, include on lines 17a and 18a only the amount of business transacted with persons actually owning the required number of shares.
17. Value of agricultural products marketed or handled for: (See instructions.)
a. * Members--
1. Actually produced by members:
Current tax year:
(a) From ---- to ----: ----
3 prior tax years:
(b) ----: ----
(c) ----: ----
(d) ----: ----
2. Not actually produced by members but marketed by them through the association:
Current tax year:
(a) From ---- to ----: ----
3 prior tax years:
(b) ----: ----
(c) ----: ----
(d) ----: ----
b. Nonmembers--
1. Actually produced by nonmembers:
Current tax year:
(a) From ---- to ----: ----
3 prior tax years:
(b) ----: ----
(c) ----: ----
(d) ----: ----
2. Not actually produced by nonmembers but marketed by them through the association
Current tax year:
(a) From ---- to ----: ----
3 prior tax years:
(b) ----: ----
(c) ----: ----
(d) ----: ----
c. Nonproducers (purchased from nonproducers for marketing by the association):
Current tax year:
(a) From ---- to ----: ----
3 prior tax years:
(b) ----: ----
(c) ----: ----
(d) ----: ----
18. Value of supplies and equipment purchased for or sold to: (See instructions.)
a. * Members who were producers:
Current tax year:
(a) From ---- to ----: ----
3 prior tax years:
(b) ----: ----
(c) ----: ----
(d) ----: ----
b. Nonmembers who were producers:
Current tax year:
(a) From ---- to ----: ----
3 prior tax years:
(b) ----: ----
(c) ----: ----
(d) ----: ----
c. Members and nonmembers who were not producers:
Current tax year:
(a) From ---- to ----: ----
3 prior tax years:
(b) ----: ----
(c) ----: ----
(d) ----: ----
19. Amount of business done with the United States Government or any of its agencies:
Current tax year:
(a) From ---- to ----: ----
3 prior tax years:
(b) ----: ----
(c) ----: ----
(d) ----: ----
20. Does the association plan to do business with the United States Government or any of its agencies in the future?
-- Yes
-- No
21a. Were all of the net earnings (after payment of dividends, if any, on capital stock) for the years shown on lines 17-19 distributed as patronage dividends? (See instructions for lines 17-19.):
-- Yes
-- No
21b. If "No," were undistributed net earnings apportioned on the records to all patrons on a patronage basis?:
-- Yes
-- No
22a. Has the organization operated in a manner consistent with the information given since the date formed?
-- Yes
-- No
22b. If "No," state the changes that have occurred and dates of the changes.: ----
<Page 4>
Part IV Financial Data
(See instructions.)
Complete the Statement of Receipts and Expenditures and Balance Sheets for the current year and for each of the three immediately preceding years that the organization was in existence.
Statement of Receipts and Expenditures, for period ending ----, ----. (If you prepare a statement of receipts and expenditures that is more descriptive and detailed than the statement below, you may submit that statement instead of this one.)
Receipts
1. Gross dues and assessments from members: ----
2. Gross dues and assessments from affiliated organizations: ----
3a. Gross amount derived from activities related to organization's exempt purpose (attach schedule): ----
3b. Less cost of goods sold: ----
3c. Net amount derived from activities related to organization's exempt purpose: ----
4a. Gross amount from other business activities (attach schedule): ----
4b. Less cost of goods sold: ----
4c. Net amount from other business activities: ----
5a. Gross amount received from sale of assets, excluding inventory items (attach schedule): ----
5b. Less cost or other basis and sales expense of assets sold (attach schedule): ----
5c. Net amount received from sale of assets, excluding inventory items: ----
6. Interest, dividends, rents and royalties: ----
7. Other receipts (attach schedule): ----
8. Total receipts--Add lines 1 through 7 in far right column (lines 1, 2, 3c, 4c, 5c, 6 and 7): ----
Expenditures
9. Compensation of officers, directors, and trustees (attach schedule): ----
10. Other salaries and wages: ----
11. Interest: ----
12. Rent: ----
13. Depreciation and depletion: ----
14. Dues and assessments to affiliated organizations: ----
15. Other expenditures (see instructions--attach schedule): ----
16. Patronage dividends (see instructions--attach schedule): ----
17. Total expenditures--Add lines 9 through 16: ----
18. Excess of receipts over expenditures (line 8 less line 17): ----
Balance Sheets--Assets
Enter dates:
Beginning date: ----
Ending date: ----
19. Cash:
Beginning date: ----
Ending date: ----
20. Trade notes and accounts receivable (less allowance for bad debts):
Beginning date: ----
Ending date: ----
21. Inventories:
Beginning date: ----
Ending date: ----
22. Investments (attach schedule):
Beginning date: ----
Ending date: ----
23. Other current assets (attach schedule):
Beginning date: ----
Ending date: ----
24. Depreciable and depletable assets (less accumulated depreciation/depletion):
Beginning date: ----
Ending date: ----
25. Land (net of any amortization):
Beginning date: ----
Ending date: ----
26. Other assets (attach schedule):
Beginning date: ----
Ending date: ----
27. Total assets:
Beginning date: ----
Ending date: ----
Liabilities and Capital
28. Accounts payable:
Beginning date: ----
Ending date: ----
29. Mortgages, notes, bonds payable in less than one year:
Beginning date: ----
Ending date: ----
30. Other current liabilities (attach schedule):
Beginning date: ----
Ending date: ----
31. Mortgages, notes, bonds payable in one year or more:
Beginning date: ----
Ending date: ----
32. Other liabilities (attach schedule):
Beginning date: ----
Ending date: ----
33. Patronage dividends allocated in noncash form, other than capital stock and interest-bearing obligations:
Beginning date: ----
Ending date: ----
34. Per-unit retains allocated in noncash form:
Beginning date: ----
Ending date: ----
35. Capital stock (enter numbers at end of year):
a. Voting preferred stock:
Number of shareholders: ----
Number of shares:
Issued for money: ----
Issued as patronage benefits: ----
Beginning date: ----
Ending date: ----
b. Nonvoting preferred stock:
Number of shareholders: ----
Number of shares:
Issued for money: ----
Issued as patronage benefits: ----
Beginning date: ----
Ending date: ----
c. Voting common stock:
Number of shareholders: ----
Number of shares:
Issued for money: ----
Issued as patronage benefits: ----
Beginning date: ----
Ending date: ----
d. Nonvoting common stock:
Number of shareholders: ----
Number of shares:
Issued for money: ----
Issued as patronage benefits: ----
Beginning date: ----
Ending date: ----
36. Paid-in or capital surplus:
Beginning date: ----
Ending date: ----
37. Retained earnings (attach schedule):
Beginning date: ----
Ending date: ----
38. Less cost of treasury stock:
Beginning date: ----
Ending date: ----
39. Total liabilities and capital:
Beginning date: ----
Ending date: ----
<Page 1>
Instructions for Form 1028(Rev. September 2006)Application for Recognition of Exemption Under Section 521 of the Internal Revenue Code
Department of the Treasury
Internal Revenue Service
Cat. No. 17138N
Section references are to the Internal Revenue code unless otherwise noted.
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 8-1/2" by 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 1120-C, U.S. Income Tax Return for Cooperative Associations. 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. User fees are subject to change. Check our website at www.irs.gov and type "User Fee" in the keyword box, or call Customer Account Services at 1-877-829-5500 for current information.
Make sure the application is complete. Remember to ...
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, you must apply for one (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 of 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).
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.
<Page 2>
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 Internal Revenue Service, Tax Products Coordinating Committee, SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW, IR-6406, Washington, DC 20224. Do not send the tax form to this address. Instead, see Where To File on page 1.
