Exempt Organizations- Private Foundations-Unrelated Income

EXEMPT ORGAN12ATIONS PRIVATE
FUUNDATlONS UNRELATED INCOME
11300 11

EXEMPTrON FROM TAX ON CORPORATIONS,
CERTAIN TRUSTS, ETC.
SK 501 [ 1 M Codtl. in) ExuIm~FROM~ . & n a-An
~ otpanttattcn

dt~crl'3cdIn
~ubxc~iori
(0w [d) or scrrim #I(?) shall bc exempt from taxation wdtr t h ~ srubrrclr unltrs
duch exemption :I dmrd under xtr~~n
302 or 5CU.

(b)TM ON U H R U A m B U S ~ E S~NCOMEM D CERTLY QMu ACmmEs.-An otganila.
tron exem t from tamtion undw subrtctio~(a) halt not b consider4 dixrtmtnatoryw h c h are bntdgtermintd in a
(i)merely W ~ Urht
W htfiu under the
nond~xrirn~na~ory
manner *thin r h t mtaninl of subparaaraph (A) ~ t thtn
t
rcduccd by any sick. accident. w untmplwmmr c o m p n a t l o n brnelils r ~ c ~ v c d
under S t i i c w Fcdcral law (or reduced by r portion d swh btnefio i t dtttrmrntd
In a ntmdiscrimurror'y mrnnn). a
961 C C H 4 r a n d u d Federal fuR t p r u

Code 5 501

7 3001

,

(it) mrrcly &cause the plan provrdc~on;? lor ernplmces w h o Jrc not cIlqiHe
lo receive rick. ~ C C I ~ C ~orI . uncm?lov~cnrcompensat~onbenriitr under S t ~ r cI r
Fcdcraf law the same bencltts ror a porrlon of such bencC~ts~f derermlntd In a
n o n d ~ s r r ~ m ~ n smanner)
ro~
which ~ c cmplovtts
h
rould rerrlvc undcr such l a r r
if such employrer were clig~bicior r u i h btnciirs, or

(iill merely k a u s c rhc plan provrdes onlv fat employers who a:e not cli~ible
undr: anorher plan (which mtnr lht requrrrmtnts af ~ubparaqraph ! . + I , o[
suppltmental uncmployrntnt cornpenrulon benefits pravldcd wholly by the
employer lhc Urnt benefits (or a pDfiiUn d such b t n e l ~ ~;sIdc~crmin:d In A
nond~$cr~rmnatotv
m a n n ~ rwhich
)
such tmplortes would rectlve under such othrr
plan 11 such cmployccs #re ellgbk under such other plaa. bu: onl! I I t a t
employers eligible undtr bolh plans would make a class~ficatlonr*hicn *auld ~c
non&xtlmtnatory w l t h i n the memlng of subparagraph t.4)

(C) A pian shall bt considered to mret the requtrtmcnt~ot subpataqtsph ( 1)
durrng he whole d any year nt ihr plan II on one dav in tach quatlrr , I 121r j i l c 5
such requiremenu.
(D)The term "supplcmtnral unemplo)rmtnt corn pensallon b t n e l i ~ s "means
M~Y(1) M c 6 u whlrh am paid to an employe btcauw of h ~ r ~nvolunr~ry
rcpararion from the tmpiovmtnt of the cmptoyrr rwhethtr or nor such separarlan
,s ~ r . n p o r u r~n) v l l ~ nd~rrrily
l
ftam a rcdvcrmn In farcr. the d~scant~nuanct
oi a

plani or owration, or other ~irnllarcondit~ons,and

(ii) sick and

accident knriirs subordimre to the bmefirs dcwnbcd in clause

(1).

(El Exanprim Jhrll not k
rnrirlcd to auch rxtmprron

dtnid undcr ruhrrcrim fa) lo anv organlrarmn
u an U9xiarton dtxnbed in paragraph (9)of r.%s

sub~ecrianntrejy k t u x ~ u c hor&anrutlm prrmda iw the piyrncnt ai > u p p i c
m t n u l unemployment kneiiu (as dciincd in subparajraph (Dxi)).
(18) A t t u t or trusrs crrared btfm June 15, 1959. farmine prrr of 3 plan providtn~
tar r l t prrmtni d hncfitr undtr r pensam plan funded only by contrtburlons o l
tmployns. if(A) under the p h , it IS-lmpowiblc. a t any rime prim to he satlsiact~onof all
liabilitru mch mmf ro crnploym undcr rhc plan. lor any pair of rhe corpus or
mtomr to be (wirhin the ~ b l year
e w thtrtaf~er)wrd for. ot divert& ro, any
bur*
other r b n rhe provrd~nlof bcntfiu under the plan.

(B) such k n r f i u am payable ro emplwm undrr a ch~sificrrionwhlch 1s scr
f o r b in !be plan arid w h X b n f ~ b d
by tht Sccrctary nor ro tx d i x r l r n ~ r . + t vIn
fa- of tmployets wha are hrlhly iompnursd cmploym (withln the mtaning of
mfim 41qq)))).
(C) such bmeiiu do noc dixriminau In favor of t m p l ~ y c r lwho are higqly
compcmaicd tmploycn ( w i t h i n rhc mernbng of JKrlon +l*q)) h plan shall not b t
conride& diwriminamy w i ~ h mthe mtrning of lhu subpragraph merclv btcausr
h e kntfiu mcivcd undar rhc plan k a r a un~lorrnrelauonship to the total
comprmrion. w rht b u r or mgulu nit d cmpnurron. oi the crnphycn cavcrtd

by tht p b , a d

(p) ia the aw of a p h u d r r w h ~ han employe may de9ignart certatn
conmbutim~
u dedur1lblr-(i) w h mtriburim dp o# e l c t d the amount w ~ t hrtsptct
&ucba fi Jbwrbk un&r xcttan 119(bH3).

10

w h ~ +a

(ii) rrqurrcmenu simrlu t o the twulttmcnts of m i o n 401tkK3M-4Ytrl art
met with r t l p t to luch clctuvt cml~ibuuons,
(iij) such tmtr~hutionsam treated a3 tlrctlve dtfcrrals tor p u r p ~ of
s section
UU(8) (ahtr than p r a q a p h (4) ~ h t r r o f lmd
,
(LV) the r q u ~ r e m t n d
r ~x c r ~ a nJOl(aX30) are met.
,
I

Far purpos~of subplngnph {DWill, rules 5trniiar to the ruln of wrlon r(JI(ky8) 3aall
apply. For p u r p s of Kcrlon 4 9 7 9 , rnr err- rontnbut~onunder r l a u ~
(iii shall be
c o n t n b u u ~under a c u b or d t f c d arrangement.
k r e a ~ du an

g 3001 Code 5 501

EXEMPT ORGANIZATIONS--

P 301 1130011

42,527

(19) r\ post or vrg3niza~~on
of Past or PreanL members of the Arrntd Forces a{ the
Unritd Startx, ot a n auxli~arr.unlt or soclety of, or a lrux o t foundstlon for, any such
port or orgJnr ratton-

' (A) arganlred In the Uni:ed 3 a ~ c ror any of ~ t porlrirlons.
s
IB) at ,cast 73 percent d rhc rnembcn nI which ate part or pcsent mrmbrr~of
rht .%tmtdForcn of the t'nucd 9 a r c r and subscantially all al rht other rntmbtrs of
w h c h a r t ~ndividualswho ate cadtts or i t * ~ p u s t yidows
~.
or widwttJ d
DI
p r w n t mtmbcn of the Armed Forct3of [he Untttd States or o[ radru. and

(0fin par! oE rhc net earnings of which lnurcr t o the bcncli~o i any
shareholder or ~ndivtduai.

prrxale

(20)an otgatrttatian nr trulL crtatcd or organrzed in the Unittd Srotcs. ~heexclus~vc
funct~onoi which IS 10 form part o l s quaiifid group legal scnices plan or plans. wthln
the mranrrrg d ~crrion 120. .ka orgtaiuctm w I ~ Wwhich rmlver cgntribrr~onr
beraua of rwrim llO(cXi)(C) shall 601 k p w e n t e d from cualilyinl ~r
.n urganlxrtlm
dcscrlbtd In this paragraph merely bccauw it providts ltgai wrv~cesor indtmnifira~ion
agaiosr ~ h cmt
c of legal rervtcts unasrclcuttd with a qualified g ~ u Ipt l i t sen-~cesphn.
(21) A trust or trusts t~rablishcdIn writma, crcarcd w o r ~ a n ~ r eind the Un~red
Surcr. and c o n ~ r ~ b u t r6
r d by an? p e r m I e x c t p l an insuransec~mpan~)
il-

ausu is cxdwvcty(i)lo sauriy, in n-hole or In part. the liability of such perm far. or wirh
r e s w r :o.clacm~for cornpenlairon for d z d i l i r y or death due to pncumaanra~s
, undtt Black Lung ACLS.
(ii) to p l y premiums for in~urancefxrlurivdycwcring such lirbili~y;and
(iii) ro ply adm~msrrariveand vthtr incidental crpcnu* d jurh r r u u
(including ltga1. account!ng acruinal. and Iruncc txpmxs) In tonnrcrim wirh
the operaL1on ol the trwr and rhe prmlvw d claims agrrnv such p t r w undtt
Black Lung ACLX and
(8) no part o l the a r m s of the L ~ Umay
L
k u d iff. or dlrened to. any
purpo* orhtr than( i ) cbe purpowJ h c r i b e d in qubwrrgnph (A),
(ii) investment (but oniy to the cxrmt that the rwrcs dtttrmlnr~thrr a
pwhn of rht urnr i s nor cunmtly n d c d fm the g u r m s d e x r i k d ,n
( A ) the DUIpmC o f such trus: or

,'

P

subparagraph I & \ ) in-

(1) public dtbt seruniies 61 tht Unltcd Statm

(tJ) obligsrlwu d r S i r l t w laal #Pr.crammr which an net in
default u toprincipal or ; n r t m t , a

{m)

rime ur dcnund d c p a i t s in 1 bank (udehd in section 581) w
an insured credit unron iwlthin the mranlng d x c t m l O I ( 6 ) o i the
Fcdcral Credit Union Act. 12 U S.C. 1732(61) k a ~ c din r h t United
Sutu. w
(iii)pymmt Into ht Black Lung Diabtliry r r u % Fwd arablished under
s t t o n PHI, or inia~thrgeneral h n d d r h t UnitcdSlaln fmuury ( a h t r than tn
u ~ u f a c t i a ,d any tax at other civil w c n m l n d I ~ a h l i r yd the ptm who
erublished or conttibu~tdto the trust\.
Far purpoacs of l h i ~
paravaph the term "Black t u n # A a j " mtlna p*n C Of tirla fl d
the Federal Mine Safety and HeaIth Act of L977, and any Stale Irr ptwdlry t o m p c m tlgn Iw diubrlity w dcrthdur tu pntumocom~osir.

I

(Z2l A trurt t r e r r t d or w a n d in [he U n i ~ dktte and ettblishd in writing by
[he plan rponwn of m u l r i e m p l ~ t rplamr ii{A) r h t purpmc OIsuch IWI; is r.rc!uuvrly-c
{i) to pay mv amaunr drxrrkd in =don 4 2 2 J l ~ M
) t h ) d t k EmplyRet~rementIncome Sccurity Act bl 1974, and
(ij) to pay r t ~ r b l and
t nncrwv rdrnrni~tmrntexpnxl in conncrlim
with the trtablishmtnt and optrailon d the Lruil and tht pr-VI@
d elarms
ogalnst the trust.

106 CCH--Standard Frdtral T u Reporu

Code 5 501 f 3001

42,518

EXEMPT ORGANIZAT:ONS-- 1 501 ( I 3601I

(01 no part o i he a s e t s d i the trulc ;nay be used (or. or
purpose orher ahan( i i ) chr

rnuermttnt

C t % , e r ~ c dto. ~ n g

in sccurrt~rr. o b l ~ e a r ~ ~ nors , Lime or dcmand depor~rs

dercr~bcdin clause (ii)of paragraph tl IV8b.

+,

,

(0
~ucbuusr mtrts thc rqurrmmrs ~f priaqrlph 42). (3). a n 0 i 0, 5trrZon
422Jb). 4ZZ3rh). or. i f applaabit, section 12131~)of rhr Employtc R r t ~ r t ~ t n r
Income fccurlry .4cr ai 1974. and
(D)rhc I ~ S Insrrumcnt
I
prwidcr t h ~ on
. djaalut~onoi tht r r y s t . arsc:s oi rsc
:rul may not be p a ~ dother than to plans which h i y e pirt~clpated,n [ k c plan or. In
rhc CPX ot
L N ~ L ntablirhrd under sccllon 4213Lh) of i u ~ h.\cr. rc plan> W I L
:esprct to which tmp]oyc:s have p a t t x c ~ p a ~ c:nd roc fund.

1

(23)Any z u o c ~ r ~ i oorgan~zed
n
before 1880 mort than 75 percent ol thc mtmbcrr o i
which art prtstnt or p u t mernbtn of the .4rmcd Forces and a pr~ncipalpurpa5t o i tsnlch
:I to provide Insurance and other benciirs to vnerxns or rhc~rdeptndcnrr.
(24) A trust d c ~ r t b dIn section UU9 01 ~ h Et r n p i y t R r : ~ r ~ m e nIncome
t
Sccurlty
Acr of 1975 !as In elItrt on the dare of the e n x t r n r r t or ~ h bc n g l c - E m p i o y t r P c e s ~ o n
Plan Amendnrcns Acr of 1%).

I

I

(ZSXAI Any cowratton or uurt whtch-

lii) has only I c l w of stock o; hnrIicid intertit, and

(1) acquitin6 real propen? and hoMin5 rii!c ta and collcct~nqrnrornr
from. such propctty, aad

(n)rcmirtlnr the murt amount o i intamc Itom such propcrrv (less
c r p n w ) i a 1 or r n a r e o ~ a n t u t r ~ducnW.
s
in ~ ~ b g t t a g n piC)
h r hich
arc shathddtn d such cwporattan or bcneficunrs d such trust.
pLtposr~g f e l r w c

(iii),

the rcrm "real prdpirv" shall n a ~ncludcany inretcw I r
rotrrmz\md %hallnot inrludt a n v rndirtcr rnrcres!. .

1

r e m t rn commm (w s t m r k r

( 8 ) cwpPrruon m trurr shaII hz dtrcribrd in lubprrapaph r.4) 'without
regard (Q whethn rht c~rprarioclar tcurc IY o r p n u r d by 1 gr murc vrgrarrrrrom
d w r j k l in ~ub@ragraph(C).
(i)a quliiied pn3ion. profit shar~nCor stork bonu plan lhat mctrs LCC

wukrernenu d muon +Ol(a).
(ii) a g o v e n ~ n t n u plm
l
(within :hc meaning of xrtxon 4 l4d)).

(iii} the Unircd S t l r n . any Sure w plillnl 1uM;r-l5ion rhcrmj. or
w
r
y or inrtrummrali~vof any oi the iartgo~nm.w

any

(iv) any wganuarion d ~ ~ n b in
t dparagraph 13).

(D) A

cwpwrrim w trust shrll In no event bt treated as dtsct~bedIn
pcrmitl 1t3 ~ h a r r h o l d c r s or
subpwagnph (A) u n [ t s ~~ u c hcorpotatlm W
bmr6ciari-

(i3 LO dirm- the corpwliron a or rrus~'sinvejtmcnt adr-ixr. followng reawnablt nonce. upon vorc of (he ~h*rehoIdmor k c i i r ~ a r a hddrng
t~
a najurrly pi
inicrrsr In the cwpwatlon or Irurt, and

(ii) t o rermlniu ~ h t uinreint in thrcorp4achW w r r d s i by c r ~ h i or
f both. of
u d~trrmrncdby rhc carpwarion w trurt:

tht fodowing aIurnrctve.

(I) by ~ l lpr itxchlntbng
~
thta s t a k i n the corparatlon or ~nterest
in he ( r u t r r u b l ~ t~c any Federal or 5 1 1 ~m u r l r l r s l a w \ ro any
or&anitlclwi de9rrtkd rn s u b p l t w a p h IC) lo long u rht s i c or crchaoq

A 3001 Code 5 501

~

EXEYPTORGANIZATIONSJ

gso1 (U3ooij

42,519

dma not tncrtasc the number of shareholders or h n c i i r ~ a n c sIn such
rotparatton or rrux above 35. ~r

(11) by having r h t ~ rstock or tntcrest rrdccmtd by the corporachon or
trust sirrr rht ~hartholdcror btntftr~arvhrr prmdtd 9(1 days nD%lCet o
ruch cvrporarlon or rrusr.
(EWi) For p u r m of rhls tillt--

(1) a carporrrlon which

15 a qualifted

u a Jtparart carprar)on. and
(U) all uxu liabllj~les,md :ternsof

substdraw shall nor Sr

rrcartd

income. drducttm. and rrcdir

o i a qualified subsidiary shall bz treated as awctg, liabilities. and iuch
jltrns (ur h t c a x
kl o f the carmrataon m ~ r u sdcrcr~bcd
~
tn

subparagraph (A).
(ii) For purpwz of ~ h l ~s u b p t a # ~ a pthe
h , term "qualified subsidiap" means
any cormration ~ f AI
. all times durrng ~ h cpetlad such corpratlon was in
existence, 100 percent of the 5lwk OI
such cotprarion i s held by the corporation
or trurr dcscrtkd in subparagraph (A).
(iii) Fw PUrpoKJ of this 3ubtiiIt. 1f lnv corparatron which was A qua!ificd
subsidiary ceases to meel lhe rqulrtmtntl of clause (ii), such torprruon >hall be
treated as a new corparatian acqutring all of Irr r s x t s (and assumia a11 of its
:
. I&~li(irs) immtdir~rly b r f ~ r ssncb ce=tiwr from :he corprarion w truss
' .
d w r i b d In ~ubparaqraph(A) in c~changefor ~ t stock,
s
(F)For putof rubparqraph (A), the t e r n "rtai proprrry" ibludcs any
Nrmal prOpclty lrhich is
under. m in c m n n t i a n with. a leaw d real
property, but only ~t ~ h rent
t aitrrburable to such pcnanrt propcrty (dt~crrnlnrd
undtr the rules o l sralsn SjWM 11) for the t a b l e year d m n a rsend l i prcrnr
of rhc tout rent fw ~ h unablt
t
year at~nbutabirto h t h ~ h cr e d and p r m a t
proprry l e a d under. w In connecttan wtth. such Icax.
.
-.
.-+ .- .
. .. m .
-2-

Code 5 501

7 3001

'

EXEMPT ORGANIZATIONS-

-

42,533

4 501 (1~2.602j

Caution: Reg. $ I.SOl(a)-I docj not reflect P.L. 91-618. P.L. gz-418, P.L.
96601, P.L.96-605, P.L. 99-51 4, P. f 00-203.or P.L. 100-647. Su f 22.602.0015
etsq.c
for the ~nternalrevenue dis~rictin which ir; ldt~tcdthe principal ptace ai buslness or
p r ~ n c ~ poffice
ai
of the organ~zarion.Subject only co [he Comm~ss~ontr'r
~nherentpower
to revoke rulings because of a change in the taw or regulations or fw other good cause.
an organiza~ionthat has been dettrmintdby the Commissioner or the disrtlct director
to be exempt under section 5Olla) or the corresponding provlaan of prlor raw may rely
upon such determ~nationso long as there are no substanttai changes in the otqanlzntion's character, purposes, or m t t h d s of operation- An organization which has Seen
determined to be extmpr under the provisions of the lnrtrnat Revenue Cade of I939 or
prior law is nor required to secure a new determination of exemption merely because o i
the enactment of the Internal Rtvcnue CWlc of 1954 unless affected by substantltc
changes in taw made by such Code.
(3) An organizat~onclaiming exemption under stction 501(a) and descr~bedin
any paragraph of section SOl(c1 (other than section 501(cX1)) shail iiIe the form of
application prescribed by the Commlssiontr and shall include thereon such in formarion
as requirtd by such form and t h t instructions isutd with r c s p c t thereto. For rules
relating to the obtaining of a determination of exempt status by an employees' trust
descn bed in section 401(a),see the regulations under section 401.

(b) Additional p r w f by particular c l a * ~
of~organizations. (1) Organtzations
a part of their applications the follow~ng
- information:
(i) Mutual insurance comprniu shall submit copies of the plicies or
certificates of membership issued by them.
(ii) In the casc of tide holding comp.niu dcscrikd in section 5Ollc)l2).
if the organization for which title is held hu not k e n spcciiicalty notified in writing by
the Internal Revenue Service that it is held to be erernpt under section jOl(aX rhe tirlc
holding company shall submit the informntim indicattd herein as neccrsary for a
determination ot the status of the organiutim f a which title is held.
(iii) An organization dumibed in section SUl(cX3) shall submit with.
andt& a part of, an application filed after July 26, 1959, a d t ~ i I c dstatement of I r s
p r o m activitiu.
It) h addition to the idomtion s p c ~ f i ~ o l called
ly
for by this section. the
Commissioner may rquire any addtiorul information dccmed n t c e s r y for a proper
determination of whtther a particulpr organizadon is exempt under sectim jOl(a). and
when deemed advisable in rhe IntcrHt of an efficient administration oi the ~nttrrral
revenue lam, he may in the c a s a 04 particulu t
of organizations prtscnbe the
form in which the pmof of exemption 3h.U k f u m G
f i d l y txtmptcd by section 60331a)
(3) An organization claiming to k 3
from filing annual returns shall submit wi and as a prrr d iu applicatton a
statement d all the facts on which i t bucJ lU claim.
(c) "WMLC
~ h a ~ h I dOT
e ri n d i v i d d " defined. Thc words "private shareholder or
individual" in stetion 501 refer t o p m s havin~a pcnonal and private interest in the
activities ol the organization.
(d) Requimment of annual rtturn~.For the annrul return rquirerncnts of organizations exempt under section jOI(a), scc xcriw! 6033 and 4 1.6033-1.
(e) Certain Prrcno Rican pension, ctc.. [nuts. Effmtivt for taxable yean beginning after Dccembcr 31, 1973. stction ImliX I ) of the Employe Retirement Income
Stcunty Act of 1974 (ERISA) (88 Stat. P I Z ) prwid- that rnutf ( r ~ d t rcertain Pucrro
Rican pension, etc., plans (as defined undtr P.R IAW Ann. tit. 13, 3165. and the
articles thereundtr), all of rhe participrnu of which are residenu the Commonwtalth of Puerto Rico. are to bc treated only for p u m of ~ t i jOf(a)
m
as trusts
described in section 401Ia). The practical effmd =tion 102211H1) is to exempt these

:i

,

. mentioned bcIow shall submit with and

'

'

%"

f

926 CCH-43-

F~

TU

~*patr

Rw g r.NX(akl(a) 7 22,603

EXEMPT ORGANIZATIONS-

4 501 [I
30011

I

-t

%#I,

Caution: Reg.

5 1,50l(a>l do#

not reflee P.L t . 1 4 I b

P . L L*,
P . L * S I I , P.L I O O . ~or
, P.L.1-7.
q--

.

P . L 924lb.P , L

1

! b y 3001.0415 et

[I
3024) $l.SOl(a) t Errmption born t r u h ~ 4 a b
) #mcrnl; p m f of
crrmptiwt.41) Section SOl(a) prwida an exemption from income w for wganizatim which are described in d m Hllte) w (d) and section 401(a), utlltss such
organiution is a "fccdu wgmiutioo" (see wcu'on 502). or u n i a it t n p g a in a
transaction d#ttibed in stctim SQ3. However, the txtmption dm not extend to
"unrelated business h b I t inmrnc" d such an o r ~ a n i z ~ t i (st6
m part IZl (SKtian 51 1
4
and foIlowing). subchapter F,chapter 1 of the Code).
(2) An -iution,
other than an e r n p m ' t n u t k r i k d in section
401(a), is not exempt from
mmly becaw it b not organired and opcrotcd for
profit. In order to utabliski its exemption, it is n t c w h a t tvtry sucb o r ~ ~ n i u t i m
claiming exemprim file an appliatim form as xt Torth klo#with the district director
for the internal revenue district in which is laated the principal place of buriness,cy
principal office of the mania1ion. Subject only ro the Cornmkioncr's inhcnnr pdmr
to revoke ruling b c c a w oE a chanp in the law or reguhdons or for other
caw,
4
an p t g a r i i z a t i ~that h a h e n dttmnined by the Comrnhsione~or tht ditritt director
to be taempt under section 501(a) or tht corresponding provision of prim law m y rely

U 3024 Reg; 5 1.501(a)-l(a)(l)

-

EXEMPT O R G A N U A T I O H S O Sol [I3wlj

42,535

Caution: Reg. § 1.50l(a)-1 d m not refln7 P.L 91418, P.L. 9-1 8, P . L
96601. pi&96605, P.L 99-514, P . t 166203. or P.L 1 0 W f . S-q 3001.0015ct

w.+

I

-

upon such dpttrmination so long as the= a* no substantial changes in the organization's character, p u m , or rnethwls of operation. An organization which has been
determined to be exempt under the provisions of the Internal Revenue Codc of 1939 o f
prior law is ROC required to s ~ u r ae new determination of exemption merely becausi: of
the enactment of h e Internal Revenue Code of 1954 unless affected by substantive
changes in law made by such Code.
(3) An organization chiming exemption under section 50J(a) and described in
any paragraph of section 50t(c) (other than section SOl(cXt)) shall file rfie form of
application p r u & M by the Commissioner and shall include thttton such informa tion
u required by such form and the instructions iuued with respect thereto. For rules
relating to the obtaining of a determination oi exempt status by an employees' trust
described in section 40i(a), see the rtguIation5 undcr s e c ~ i400,
~.
.. ,.

LOSS OF EXEMPTION-LOBBYING-

4 SM ¶as!

42,765

[a 30951

STATUS A ~ E ORGANIZATION
R
CEASES to
QUALIFY+OREXEMPTION UNDER SECTION SQI(cX3)~ECAUSEOF
SUBSTANTIAL LOBBYING

t

I

&L W)) (1wCode]. (a)

G p r p W RW-An

wpniutjon which-

(1) rm u t m p t (ar mu dttmnincd by the Stcmury to k exempt) Itom Uxatlon
under x c t h 501(a) by r
w d h 6 on wpni=tlon dtlcnbrd In =rim S[ll(c)(3),
and

(A) by raroc of curying an p r o p y d a . w othe*ix attempting, to innucncc
Iccuktim. a
by terwn d putidparing in, w intemning in, any pdiliol campaign on
khlt d (or in oppsium Lo) any d & w for public office,

a)

Code 5 504

7 3095

ORGAWIZATION REQUIREMENT%

§ 503

(Y 30981

cn 3 ~ 9 t8

ADDITIONAL REQUIREMENTS FOR
ORGANILA'T1ONS DfSCRIBED IN PARAGRAPH (P), (13,OR (20)QF
SECTION 501(e)

I

3
;8

I

I.

,,

(2)
W
*m-P*rrmpb
( I ) ihli nor
apply to any m#uiut~onwhich L put d a p b mriubincd punurnl tam i m m c n t
bcrwempm u r i v n *ad I w mom t m p l g n il chr SKsturp. fin& that
such agrcrnent u a COUK~IVCb a r ~ r yqm m c n c and t f u r such pkn
he~ b j m
d g d hi& bu~ainingk r w m turtr tmp~ ~ W P C O Land
I W swh tmploycl or
cmployrm

(1 )

Go--Eartpt

u aht-

rquaemenu d rhil s u k t i o n only ~i-

# in U t h submtim.

p h m mceu he

(A) eocb c h a d k n e f i u undcr tht ptm is prpvidd undtr a elwilicrrion of
cmploym which i s xt f m h in tht pLn md which rr fovnd by rhr k
r
t
t
u
y npt t~
k dixnmlrricwy in farm o i t m p l a y u who rre highly Eornpmurcd 1ndiv1dw4
a&

{B\in tht ~ A Wd tach c l w al bcfitliu. + ~ hbtncfiil ds fin dixnminart ID
[ a m ~i employem who art hr6hIy c m p n s a ~ c dtndiv\dualr.
A lilt wurmrt. disability. lcvenncc p y , or 5uppLment+ unempbymea compnurion
bnrfic shall nm br rons~dwedto [a81 zo m e 1 tht rwutrmtnu d rubparagraph (131
merely h u e rhc benrfiu ~wai1abltk a r a uniform nlauon*hra to the ~ o ucl o m p n u tion or he k i c u rcgubr rat* of cons~nsatron.ul cmpluyctq cw~~cd
by the plan.
(2) E x a m w m m mmmas.-Far p u r m o f parapaph (I).
there may k
cxsiudcd item corrlidcnriarr-(A) t m p i m whv L v c nor m p l r r t d 3 ycan pf w r v ~ c t .
(8) cmphyea rho hrvc nw at mined agt 21.
(0
w*rrml tmplaym or l
a rhan hall+rimrtmplwtm.
ID)tmploynr nm ~nchrdedin this plan wba I r e included In iun\t of empioytq
c ~ v e r 4by an w m e n t hrwten employ= rtptCKnUrrvta and 1 w mwt employm whieh rhe k c r t ~ u y
Tim& ro k a c o l l ~ u v kt r p m i n g amtmtnt i l ~ h cc l a o~(
knd~uinwlvtd w u the sub+[ d rud hi& b a r y i n : ~b r w t t n such employee
rcpmnurivc3 and rucb unployrr or c m p l q m . and
(21 M~IQTL# who uc nmmidtnt ilicnr and who rccetvr no crrntd inromt
(WIWh e memmg d ~ c i i g n911(dMZ)) born I h c trnploytr which c e n s t ~ r u r n
hsmt Iram m a wilhin rtlr United S u m (wtthin ~ h meaning
t
oi xt:lm
861(.KJlh

1

'

(3) llnuunon w RmEslYDN mmx m .u--C,ncm
a u PR6Vmrn.In ~ ba
t d ~ l l btnefit
y
im which a W s i ol ~rhrs chapter ofhcf than t h ~ ssubscrrrm

r u b . puagmph ( $ 1 shdi na apply but tht rquurmcnu of
hsubwnura r h U be mcr ar)j ii rbt npndwnmuwm rub m p m d d rrr wruIid
with r
nm to sUZII k n r f i ~
(4) m
I-4
L& t k ~ i o n
Uf ~ h rmp!vm.
t
f M mwc p h i 3 of such
employer m r y be tmrd u I plan Ia pupo~a
d this ~ ~ h c i o n
(51 WY
m
m rn*vWl&--P~~p i ~ dmthir sub-.
PCdcttmi.
anurn as LO w h d m an ddui t r h~ghlycomwlunted individual shiU k nu&
un&g rulr, *LU
LO t& nJCl fm determining r h c k r & ~ n d i v r d du r highly
cpm-td
em( w i t h L& ammq d
11qq)).
(6) ~ ~ . - F purpaa
c u d tbir m h r i m , tht l a m "mmpcnutioa" h
u
h e
tins such wrm by d m 4141).
(T) pOalXlO m
m UYrr.-h plw d d not k tmlrd u w r i n g the
rqummau d lhir &rim
unlnr undcr rfu p h the m u r l cmpnadw d u r h
52W.W. Thc kmay
cmpbyrc u b rnw . s a m e fa ipy ycu d- na
djucr hm,MXI-cv
rht v ~ l r
t i r n c r d n thrumcawnneru u m k r m
4lHd). 'lbL prrptpk 3brll m apply In d t t ~ m i n i n tw h t h a the raplummcnw d
w w 7qd)srr mtL
pmvida -mirrrriPa

-

m
t 0-m
N m S-MY
*t If b ~ P ~ Y
t ~M
TAX.
Sr~wu(1) Ilr --&
Wgaiyum Pall nol be ~tot4 nn ormir*rtm dnvikd
in p a n p p h (R(If). a 120)d rcum 3 1 ( c b
(A) u h it bu i w n R ~ I X 10 I k
in swh mannn u me *I=m y by
tbu it e applyin$ la ruMrion d such s u r l y pr
ths Own$ af s u b notice, it such n ~ i t IS
t m v t n diet
( 8 ) 19s e r prrid
the Limc pmriM by Uw %mwb~ rtrnhtrm (am g k n g nmrcr u d t r t h ~ ~
(c)

--

-&.

-.

a m nr
~ m n ~ r w ~ a -h
I nbr d m y qanitorim la
1984. !he t u # Ipr @van6 norice vodtr p r r w p h tl) h U nm
& k f n r ~ h r d ~ ~yariltaaKhdurdchctm~Lm~L.
i
(2)

uirumt m fully 18,