IRS · Official form

Form 1028, Application for Recognition of Exemption Under Section 521

Form 1028 is how a farmers’ cooperative applies for tax-exempt status under section 521 of the Internal Revenue Code. Fill in the official IRS PDF below and download it.

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What is 1028?

Form 1028, Application for Recognition of Exemption Under Section 521 of the Internal Revenue Code, is the application a farmers’, fruit growers’, or similar cooperative files to ask the IRS to recognize it as exempt under section 521. The application collects the cooperative’s organizing documents, membership and stock structure, and details about how it markets products or purchases supplies for members.

A favorable determination lets the cooperative use the special deductions available to section 521 cooperatives. The application is usually submitted with a user fee, and the IRS reviews it before issuing a determination letter.

Who files 1028?

Farmers’ cooperatives marketing members’ products and returning proceeds to them
Cooperatives purchasing supplies and equipment for members at cost plus expenses
Fruit growers’ and similar agricultural associations organized on a cooperative basis
Cooperatives that want a formal IRS determination of section 521 status rather than self-assessing

How to fill out 1028

Fill in the cooperative’s name, address, EIN, and date of incorporation on the first page.
Answer the activity questions: what the cooperative markets or purchases, who it deals with, and how much business is done with nonmembers.
Describe the stock and membership structure, including voting rights and dividend rates on any capital stock.
Complete the financial data schedules for the years requested.
Download the PDF, attach the required organizing documents and user fee form, and mail the package to the IRS address in the instructions.

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Page 3 35 fields

1a Full name of organization (See instructions.)

b 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)

b 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

Line 6a. Has the organization filed Federal income tax returns? Yes.

Line 6a. No.

Line 6b. If "Yes", state the form numbers, years filed, and Internal Revenue office where filed. 3 lines available for entry. Line 1.

Line 6b. 3 lines available for entry. Line 2.

Line 6b. 3 lines available for entry. Line 3.

Corporation—Articles of Incorporation, bylaws

Other—Constitution or Articles of Association, bylaws

Number of shares of each class of stock currently outstanding, if any, the value of the consideration for which issued, and the rate of

Line 1a. Amount.

Line 1a. Rate of Dividend.

Line 1b. Preferred stock (nonvoting). Shares.

Line 1b. Amount.

Line 1b. Rate of Dividend.

Line 1c. Common stock (voting). Shares.

Line 1c. Amount.

Line 1c. Rate of Dividend.

Line 1d. Common stock (nonvoting). Shares.

Line 1d. Amount.

Line 1d. Rate of Dividend.

Line 2. Number of shares of capital stock (other than nonvoting preferred) owned by: a. Producers.

Line 2b. Nonproducers.

Line 2c. Current and active producers.

Line 2d. Total number of shares - Add lines 2a and 2b.

Line 2e. 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

Line 5. Legal rate of interest in the state where the association is located.

(Title or authority of signer)

Page 4 31 fields

Page 5 64 fields

Page 6 88 fields

(If you prepare a statement of receipts and expenditures that is more descriptive and detailed than the statement below, you may submit

Statement of Receipts and Expenditures, for period ending (date), (enter year).

Part 4. Financial Data. Receipts. Line 1. Gross dues and assessments from members.

Line 2. Gross dues and assessments from affiliated organizations.

Line 3a. Gross amount derived from activities related to organization's exempt purpose (attach schedule).

Line 3b. Open parentheses. Less cost of goods sold. Close parentheses.

Line 3c. Gross amount derived from activities related to organization's exempt purpose (attach schedule) less cost of goods sold.

Line 4a. Gross amount from other business activities (attach schedule).

Line 4b. Open parentheses. Less cost of goods sold. Close parentheses.

Line 4c. Gross amount from other business activities less cost of goods sold.

Line 5a. Gross amount received from sale of assets, excluding inventory items (attach schedule).

Line 5b. Open parentheses. Less cost or other basis and sales expense of assets sold (attach schedule). Close parentheses.

Line 5c. Gross amount received from sale of assets, excluding inventory items less cost or other basis and sales expese of assets sold.

Line 6. Interest, dividends, rents and royalties.

Line 7. Other receipts (attach schedule).

Line 8. Total receipts. Add lines 1 through 7 in far right column.

Part 4. Financial Data. Expenditures. Line 9. Compensation of officers, directors, and trustees (attach schedule).

Line 10. Other salaries and wages.

Line 11. Interest.

Line 12. Rent.

Line 13. Depreciation and depletion.

Line 14. Dues and assessments to affiliated organizations.

Line 15. Other expenditures (see instructions - attach schedule).

Line 16. Patronage dividends (see instructions - attach schedule).

Line 17. Total expenditures - Add lines 9 through 16.

Line 18. Excess of receipts over expenditures (line 8 less line 17).

Part 4. Financial Data. Balance Sheets. Enter dates. Beginning date.

Ending date.

Part 4. Financial Data. Balance Sheets. Assets. Line 19. Cash. Beginning date.

Line 19. Ending date.

Line 20. Trade notes and accounts receivable (less allowance for bad debts). Beginning date.

Line 20. Ending date.

Line 21. Inventories. Beginning date.

Line 21. Ending date.

Line 22. Investments (attach schedule). Beginning date.

Line 22. Ending date.

Line 23. Other current assets (attach schedule). Beginning date.

Line 23. Ending date.

Line 24. Depreciable and depletable assets (less accumulated depreciation/depletion). Beginning date.

Line 24. Ending date.

Line 25. Land (net of any amortization). Beginning date.

Line 25. Ending date.

Line 26. Other assets (attach schedule). Beginning date.

Line 26. Ending date.

Line 27. Total assets. Beginning date.

Line 27. Ending date.

Part 4. Financial Data. Balance Sheets. Liabilities and Capital. Line 28. Accounts payable. Beginning date.

Line 28. Ending date.

Line 29. Mortgages, notes, bonds payable in less than one year. Beginning date.

Line 29. Ending date.

Line 30. Other current liabilities (attach schedule). Beginning date.

Line 30. Ending date.

Line 31. Mortgages, notes, bonds payable in one year or more. Beginning date.

Line 31. Ending date.

Line 32. Other liabilities (attach schedule). Beginning date.

Line 32. Ending date.

Line 33. Patronage dividends allocated to noncash form, other than capital stock and interest-bearing obligations. Beginning date.

Line 33. Ending date.

Line 34. Per-unit retains allocated in noncash form. Beginning date.

Line 34. Ending date.

Line 35. Capital stock (enter numbers at end of year): a. Voting preferred stock. Number of shareholders.

Line 35a. Number of shares. Issued for money.

Line 35a. Number of shares. Issued as patronage benefits.

Line 35a. Beginning date.

Line 35a. Ending date.

Line 35b. Nonvoting preferred stock. Number of shareholders.

Line 35b. Number of shares. Issued for money.

Line 35b. Number of shares. Issued as patronage benefits.

Line 35b. Beginning date.

Line 35b. Ending date.

Line 35c. Voting common stock. Number of shareholders.

Line 35c. Number of shares. Issued for money.

Line 35c. Number of shares. Issued as patronage benefits.

Line 35c. Beginning date.

Line 35c. Ending date.

Line 35d. Nonvoting common stock. Number of shareholders.

Line 35d. Number of shares. Issued for money.

Line 35d. Number of shares. Issued as patronage benefits.

Line 35d. Beginning date.

Line 35d. Ending date.

Line 36. Paid-in or capital surplus. Beginning date.

Line 36. Ending date.

Line 37. Retained earnings (attach schedule). Beginning date.

Line 37. Ending date.

Line 38. Open parentheses. Less cost of treasury stock. Beginning date. Close parentheses.

Line 38. Open parentheses. Ending date. Close parentheses.

Line 39. Total liabilities and capital. Beginning date.

Line 39. Ending date.

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Frequently asked questions

Does filing Form 1028 by itself make the cooperative exempt?

No. The IRS reviews the application and issues a determination letter. The cooperative is treated under section 521 only if the IRS recognizes the exemption, so keep operating and filing normally until you hear back.

Is there a fee to file Form 1028?

Yes, exemption applications generally require a user fee submitted with Form 8718. Check the current fee schedule at irs.gov before mailing.

Do exempt cooperatives still file annual returns?

Yes. Section 521 cooperatives still file an annual income tax return for cooperatives and pay tax on income that is not offset by the special deductions.

Form 1028, Application for Recognition of Exemption Under Section 521

What is 1028?

Who files 1028?

How to fill out 1028

Quick fill 1028 on this page

Frequently asked questions

Related forms

Form 990, Return of Organization Exempt From Income Tax

Form SS-4, Application for Employer Identification Number

Form 2848, Power of Attorney and Declaration of Representative