-CITE-
26 USC Subchapter F - Exempt Organizations 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 1 - NORMAL TAXES AND SURTAXES
Subchapter F - Exempt Organizations
-HEAD-
SUBCHAPTER F - EXEMPT ORGANIZATIONS
-MISC1-
Part
I. General rule.
II. Private foundations.
III. Taxation of business income of certain exempt
organizations.
IV. Farmers' cooperatives.
V. Shipowners' protection and indemnity associations.
VI. Political organizations.
VII. Certain homeowners associations.
VIII. Higher education savings entities.
AMENDMENTS
1997 - Pub. L. 105-34, title II, Sec. 211(e)(1)(B), Aug. 5, 1997,
111 Stat. 812, substituted "Higher education savings entities" for
"Qualified State tuition programs" in part VIII heading.
1996 - Pub. L. 104-188, title I, Sec. 1806(b)(2), Aug. 20, 1996,
110 Stat. 1898, added part VIII heading.
1976 - Pub. L. 94-455, title XXI, Sec. 2101(d), Oct. 4, 1976, 90
Stat. 1899, added part VII heading.
1975 - Pub. L. 93-625, Sec. 10(d), Jan. 3, 1975, 88 Stat. 2119,
added part VI heading.
1969 - Pub. L. 91-172, title I, Sec. 101(j)(58), Dec. 30, 1969,
83 Stat. 532, added part II heading, and redesignated former parts
II, III and IV as parts III, IV and V, respectively.
-SECREF-
SUBCHAPTER REFERRED TO IN OTHER SECTIONS
This subchapter is referred to in section 532, 542, 552 of this
title.
-End-
-CITE-
26 USC PART I - GENERAL RULE 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 1 - NORMAL TAXES AND SURTAXES
Subchapter F - Exempt Organizations
PART I - GENERAL RULE
-HEAD-
PART I - GENERAL RULE
-MISC1-
Sec.
501. Exemption from tax on corporations, certain trusts,
etc.
502. Feeder organizations.
503. Requirements for exemption.
504. Status after organization ceases to qualify for
exemption under section 501(c)(3) because of
substantial lobbying or because of political
activities.
505. Additional requirements for organizations described in
paragraph (9), (17), or (20) of section 501(c).
AMENDMENTS
1987 - Pub. L. 100-203, title X, Sec. 10711(b)(2)(B), Dec. 22,
1987, 101 Stat. 1330-464, substituted "substantial lobbying or
because of political activities" for "substantial lobbying" in item
504.
1984 - Pub. L. 98-369, div. A, title V, Sec. 513(b), July 18,
1984, 98 Stat. 865, added item 505.
1976 - Pub. L. 94-455, title XIII, Sec. 1307(d)(3)(B), Oct. 4,
1976, 90 Stat. 1728, added item 504.
1969 - Pub. L. 91-172, title I, Sec. 101(j)(61), Dec. 30, 1969,
83 Stat. 532, struck out item 504 "Denial of exemption".
-End-
-CITE-
26 USC Sec. 501 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 1 - NORMAL TAXES AND SURTAXES
Subchapter F - Exempt Organizations
PART I - GENERAL RULE
-HEAD-
Sec. 501. Exemption from tax on corporations, certain trusts, etc.
-STATUTE-
(a) Exemption from taxation
An organization described in subsection (c) or (d) or section
401(a) shall be exempt from taxation under this subtitle unless
such exemption is denied under section 502 or 503.
(b) Tax on unrelated business income and certain other activities
An organization exempt from taxation under subsection (a) shall
be subject to tax to the extent provided in parts II, III, and VI
of this subchapter, but (notwithstanding parts II, III, and VI of
this subchapter) shall be considered an organization exempt from
income taxes for the purpose of any law which refers to
organizations exempt from income taxes.
(c) List of exempt organizations
The following organizations are referred to in subsection (a):
(1) Any corporation organized under Act of Congress which is an
instrumentality of the United States but only if such corporation
-
(A) is exempt from Federal income taxes -
(i) under such Act as amended and supplemented before July
18, 1984, or
(ii) under this title without regard to any provision of
law which is not contained in this title and which is not
contained in a revenue Act, or
(B) is described in subsection (l).
(2) Corporations organized for the exclusive purpose of holding
title to property, collecting income therefrom, and turning over
the entire amount thereof, less expenses, to an organization
which itself is exempt under this section. Rules similar to the
rules of subparagraph (G) of paragraph (25) shall apply for
purposes of this paragraph.
(3) Corporations, and any community chest, fund, or foundation,
organized and operated exclusively for religious, charitable,
scientific, testing for public safety, literary, or educational
purposes, or to foster national or international amateur sports
competition (but only if no part of its activities involve the
provision of athletic facilities or equipment), or for the
prevention of cruelty to children or animals, no part of the net
earnings of which inures to the benefit of any private
shareholder or individual, no substantial part of the activities
of which is carrying on propaganda, or otherwise attempting, to
influence legislation (except as otherwise provided in subsection
(h)), and which does not participate in, or intervene in
(including the publishing or distributing of statements), any
political campaign on behalf of (or in opposition to) any
candidate for public office.
(4)(A) Civic leagues or organizations not organized for profit
but operated exclusively for the promotion of social welfare, or
local associations of employees, the membership of which is
limited to the employees of a designated person or persons in a
particular municipality, and the net earnings of which are
devoted exclusively to charitable, educational, or recreational
purposes.
(B) Subparagraph (A) shall not apply to an entity unless no
part of the net earnings of such entity inures to the benefit of
any private shareholder or individual.
(5) Labor, agricultural, or horticultural organizations.
(6) Business leagues, chambers of commerce, real-estate boards,
boards of trade, or professional football leagues (whether or not
administering a pension fund for football players), not organized
for profit and no part of the net earnings of which inures to the
benefit of any private shareholder or individual.
(7) Clubs organized for pleasure, recreation, and other
nonprofitable purposes, substantially all of the activities of
which are for such purposes and no part of the net earnings of
which inures to the benefit of any private shareholder.
(8) Fraternal beneficiary societies, orders, or associations -
(A) operating under the lodge system or for the exclusive
benefit of the members of a fraternity itself operating under
the lodge system, and
(B) providing for the payment of life, sick, accident, or
other benefits to the members of such society, order, or
association or their dependents.
(9) Voluntary employees' beneficiary associations providing for
the payment of life, sick, accident, or other benefits to the
members of such association or their dependents or designated
beneficiaries, if no part of the net earnings of such association
inures (other than through such payments) to the benefit of any
private shareholder or individual.
(10) Domestic fraternal societies, orders, or associations,
operating under the lodge system -
(A) the net earnings of which are devoted exclusively to
religious, charitable, scientific, literary, educational, and
fraternal purposes, and
(B) which do not provide for the payment of life, sick,
accident, or other benefits.
(11) Teachers' retirement fund associations of a purely local
character, if -
(A) no part of their net earnings inures (other than through
payment of retirement benefits) to the benefit of any private
shareholder or individual, and
(B) the income consists solely of amounts received from
public taxation, amounts received from assessments on the
teaching salaries of members, and income in respect of
investments.
(12)(A) Benevolent life insurance associations of a purely
local character, mutual ditch or irrigation companies, mutual or
cooperative telephone companies, or like organizations; but only
if 85 percent or more of the income consists of amounts collected
from members for the sole purpose of meeting losses and expenses.
(B) In the case of a mutual or cooperative telephone company,
subparagraph (A) shall be applied without taking into account any
income received or accrued -
(i) from a nonmember telephone company for the performance of
communication services which involve members of the mutual or
cooperative telephone company,
(ii) from qualified pole rentals,
(iii) from the sale of display listings in a directory
furnished to the members of the mutual or cooperative telephone
company, or
(iv) from the prepayment of a loan under section 306A, 306B,
or 311 (!1) of the Rural Electrification Act of 1936 (as in
effect on January 1, 1987).
(C) In the case of a mutual or cooperative electric company,
subparagraph (A) shall be applied without taking into account any
income received or accrued -
(i) from qualified pole rentals, or
(ii) from the prepayment of a loan under section 306A, 306B,
or 311 (!1) of the Rural Electrification Act of 1936 (as in
effect on January 1, 1987).
(D) For purposes of this paragraph, the term "qualified pole
rental" means any rental of a pole (or other structure used to
support wires) if such pole (or other structure) -
(i) is used by the telephone or electric company to support
one or more wires which are used by such company in providing
telephone or electric services to its members, and
(ii) is used pursuant to the rental to support one or more
wires (in addition to the wires described in clause (i)) for
use in connection with the transmission by wire of electricity
or of telephone or other communications.
For purposes of the preceding sentence, the term "rental"
includes any sale of the right to use the pole (or other
structure).
(13) Cemetery companies owned and operated exclusively for the
benefit of their members or which are not operated for profit;
and any corporation chartered solely for the purpose of the
disposal of bodies by burial or cremation which is not permitted
by its charter to engage in any business not necessarily incident
to that purpose and no part of the net earnings of which inures
to the benefit of any private shareholder or individual.
(14)(A) Credit unions without capital stock organized and
operated for mutual purposes and without profit.
(B) Corporations or associations without capital stock
organized before September 1, 1957, and operated for mutual
purposes and without profit for the purpose of providing reserve
funds for, and insurance of shares or deposits in -
(i) domestic building and loan associations,
(ii) cooperative banks without capital stock organized and
operated for mutual purposes and without profit,
(iii) mutual savings banks not having capital stock
represented by shares, or
(iv) mutual savings banks described in section 591(b) (!2)
(C) Corporations or associations organized before September 1,
1957, and operated for mutual purposes and without profit for the
purpose of providing reserve funds for associations or banks
described in clause (i), (ii), or (iii) of subparagraph (B); but
only if 85 percent or more of the income is attributable to
providing such reserve funds and to investments. This
subparagraph shall not apply to any corporation or association
entitled to exemption under subparagraph (B).
(15)(A) Insurance companies or associations other than life
(including interinsurers and reciprocal underwriters) if the net
written premiums (or, if greater, direct written premiums) for
the taxable year do not exceed $350,000.
(B) For purposes of subparagraph (A), in determining whether
any company or association is described in subparagraph (A), such
company or association shall be treated as receiving during the
taxable year amounts described in subparagraph (A) which are
received during such year by all other companies or associations
which are members of the same controlled group as the insurance
company or association for which the determination is being made.
(C) For purposes of subparagraph (B), the term "controlled
group" has the meaning given such term by section
831(b)(2)(B)(ii).
(16) Corporations organized by an association subject to part
IV of this subchapter or members thereof, for the purpose of
financing the ordinary crop operations of such members or other
producers, and operated in conjunction with such association.
Exemption shall not be denied any such corporation because it has
capital stock, if the dividend rate of such stock is fixed at not
to exceed the legal rate of interest in the State of
incorporation or 8 percent per annum, whichever is greater, on
the value of the consideration for which the stock was issued,
and if substantially all such stock (other than nonvoting
preferred stock, the owners of which are not entitled or
permitted to participate, directly or indirectly, in the profits
of the corporation, on dissolution or otherwise, beyond the fixed
dividends) is owned by such association, or members thereof; nor
shall exemption be denied any such corporation because there is
accumulated and maintained by it a reserve required by State law
or a reasonable reserve for any necessary purpose.
(17)(A) A trust or trusts forming part of a plan providing for
the payment of supplemental unemployment compensation benefits,
if -
(i) under the plan, it is impossible, at any time prior to
the satisfaction of all liabilities, with respect to employees
under the plan, for any part of the corpus or income to be
(within the taxable year or thereafter) used for, or diverted
to, any purpose other than the providing of supplemental
unemployment compensation benefits,
(ii) such benefits are payable to employees under a
classification which is set forth in the plan and which is
found by the Secretary not to be discriminatory in favor of
employees who are highly compensated employees (within the
meaning of section 414(q)), and
(iii) such benefits do not discriminate in favor of employees
who are highly compensated employees (within the meaning of
section 414(q)). A plan shall not be considered discriminatory
within the meaning of this clause merely because the benefits
received under the plan bear a uniform relationship to the
total compensation, or the basic or regular rate of
compensation, of the employees covered by the plan.
(B) In determining whether a plan meets the requirements of
subparagraph (A), any benefits provided under any other plan
shall not be taken into consideration, except that a plan shall
not be considered discriminatory -
(i) merely because the benefits under the plan which are
first determined in a nondiscriminatory manner within the
meaning of subparagraph (A) are then reduced by any sick,
accident, or unemployment compensation benefits received under
State or Federal law (or reduced by a portion of such benefits
if determined in a nondiscriminatory manner), or
(ii) merely because the plan provides only for employees who
are not eligible to receive sick, accident, or unemployment
compensation benefits under State or Federal law the same
benefits (or a portion of such benefits if determined in a
nondiscriminatory manner) which such employees would receive
under such laws if such employees were eligible for such
benefits, or
(iii) merely because the plan provides only for employees who
are not eligible under another plan (which meets the
requirements of subparagraph (A)) of supplemental unemployment
compensation benefits provided wholly by the employer the same
benefits (or a portion of such benefits if determined in a
nondiscriminatory manner) which such employees would receive
under such other plan if such employees were eligible under
such other plan, but only if the employees eligible under both
plans would make a classification which would be
nondiscriminatory within the meaning of subparagraph (A).
(C) A plan shall be considered to meet the requirements of
subparagraph (A) during the whole of any year of the plan if on
one day in each quarter it satisfies such requirements.
(D) The term "supplemental unemployment compensation benefits"
means only -
(i) benefits which are paid to an employee because of his
involuntary separation from the employment of the employer
(whether or not such separation is temporary) resulting
directly from a reduction in force, the discontinuance of a
plant or operation, or other similar conditions, and
(ii) sick and accident benefits subordinate to the benefits
described in clause (i).
(E) Exemption shall not be denied under subsection (a) to any
organization entitled to such exemption as an association
described in paragraph (9) of this subsection merely because such
organization provides for the payment of supplemental
unemployment benefits (as defined in subparagraph (D)(i)).
(18) A trust or trusts created before June 25, 1959, forming
part of a plan providing for the payment of benefits under a
pension plan funded only by contributions of employees, if -
(A) under the plan, it is impossible, at any time prior to
the satisfaction of all liabilities with respect to employees
under the plan, for any part of the corpus or income to be
(within the taxable year or thereafter) used for, or diverted
to, any purpose other than the providing of benefits under the
plan,
(B) such benefits are payable to employees under a
classification which is set forth in the plan and which is
found by the Secretary not to be discriminatory in favor of
employees who are highly compensated employees (within the
meaning of section 414(q)),
(C) such benefits do not discriminate in favor of employees
who are highly compensated employees (within the meaning of
section 414(q)). A plan shall not be considered discriminatory
within the meaning of this subparagraph merely because the
benefits received under the plan bear a uniform relationship to
the total compensation, or the basic or regular rate of
compensation, of the employees covered by the plan, and
(D) in the case of a plan under which an employee may
designate certain contributions as deductible -
(i) such contributions do not exceed the amount with
respect to which a deduction is allowable under section
219(b)(3),
(ii) requirements similar to the requirements of section
401(k)(3)(A)(ii) are met with respect to such elective
contributions,
(iii) such contributions are treated as elective deferrals
for purposes of section 402(g), and
(iv) the requirements of section 401(a)(30) are met.
For purposes of subparagraph (D)(ii), rules similar to the rules
of section 401(k)(8) shall apply. For purposes of section 4979,
any excess contribution under clause (ii) shall be treated as an
excess contribution under a cash or deferred arrangement.
(19) A post or organization of past or present members of the
Armed Forces of the United States, or an auxiliary unit or
society of, or a trust or foundation for, any such post or
organization -
(A) organized in the United States or any of its possessions,
(B) at least 75 percent of the members of which are past or
present members of the Armed Forces of the United States and
substantially all of the other members of which are individuals
who are cadets or are spouses, widows,,(!3) widowers,
ancestors, or lineal descendants of past or present members of
the Armed Forces of the United States or of cadets, and
(C) no part of the net earnings of which inures to the
benefit of any private shareholder or individual.
(20) an (!4) organization or trust created or organized in the
United States, the exclusive function of which is to form part of
a qualified group legal services plan or plans, within the
meaning of section 120. An organization or trust which receives
contributions because of section 120(c)(5)(C) shall not be
prevented from qualifying as an organization described in this
paragraph merely because it provides legal services or
indemnification against the cost of legal services unassociated
with a qualified group legal services plan.
(21)(A) A trust or trusts established in writing, created or
organized in the United States, and contributed to by any person
(except an insurance company) if -
(i) the purpose of such trust or trusts is exclusively -
(I) to satisfy, in whole or in part, the liability of such
person for, or with respect to, claims for compensation for
disability or death due to pneumoconiosis under Black Lung
Acts,
(II) to pay premiums for insurance exclusively covering
such liability,
(III) to pay administrative and other incidental expenses
of such trust in connection with the operation of the trust
and the processing of claims against such person under Black
Lung Acts, and
(IV) to pay accident or health benefits for retired miners
and their spouses and dependents (including administrative
and other incidental expenses of such trust in connection
therewith) or premiums for insurance exclusively covering
such benefits; and
(ii) no part of the assets of the trust may be used for, or
diverted to, any purpose other than -
(I) the purposes described in clause (i),
(II) investment (but only to the extent that the trustee
determines that a portion of the assets is not currently
needed for the purposes described in clause (i)) in qualified
investments, or
(III) payment into the Black Lung Disability Trust Fund
established under section 9501, or into the general fund of
the United States Treasury (other than in satisfaction of any
tax or other civil or criminal liability of the person who
established or contributed to the trust).
(B) No deduction shall be allowed under this chapter for any
payment described in subparagraph (A)(i)(IV) from such trust.
(C) Payments described in subparagraph (A)(i)(IV) may be made
from such trust during a taxable year only to the extent that the
aggregate amount of such payments during such taxable year does
not exceed the lesser of -
(i) the excess (if any) (as of the close of the preceding
taxable year) of -
(I) the fair market value of the assets of the trust, over
(II) 110 percent of the present value of the liability
described in subparagraph (A)(i)(I) of such person, or
(ii) the excess (if any) of -
(I) the sum of a similar excess determined as of the close
of the last taxable year ending before the date of the
enactment of this subparagraph plus earnings thereon as of
the close of the taxable year preceding the taxable year
involved, over
(II) the aggregate payments described in subparagraph
(A)(i)(IV) made from the trust during all taxable years
beginning after the date of the enactment of this
subparagraph.
The determinations under the preceding sentence shall be made by
an independent actuary using actuarial methods and assumptions
(not inconsistent with the regulations prescribed under section
192(c)(1)(A)) each of which is reasonable and which are
reasonable in the aggregate.
(D) For purposes of this paragraph:
(i) The term "Black Lung Acts" means part C of title IV of
the Federal Mine Safety and Health Act of 1977, and any State
law providing compensation for disability or death due to that
pneumoconiosis.
(ii) The term "qualified investments" means -
(I) public debt securities of the United States,
(II) obligations of a State or local government which are
not in default as to principal or interest, and
(III) time or demand deposits in a bank (as defined in
section 581) or an insured credit union (within the meaning
of section 101(7) of the Federal Credit Union Act, 12 U.S.C.
1752(7)) located in the United States.
(iii) The term "miner" has the same meaning as such term has
when used in section 402(d) of the Black Lung Benefits Act (30
U.S.C. 902(d)).
(iv) The term "incidental expenses" includes legal,
accounting, actuarial, and trustee expenses.
(22) A trust created or organized in the United States and
established in writing by the plan sponsors of multiemployer
plans if -
(A) the purpose of such trust is exclusively -
(i) to pay any amount described in section 4223(c) or (h)
of the Employee Retirement Income Security Act of 1974, and
(ii) to pay reasonable and necessary administrative
expenses in connection with the establishment and operation
of the trust and the processing of claims against the trust,
(B) no part of the assets of the trust may be used for, or
diverted to, any purpose other than -
(i) the purposes described in subparagraph (A), or
(ii) the investment in securities, obligations, or time or
demand deposits described in clause (ii) of paragraph
(21)(B),
(C) such trust meets the requirements of paragraphs (2), (3),
and (4) of section 4223(b), 4223(h), or, if applicable, section
4223(c) of the Employee Retirement Income Security Act of 1974,
and
(D) the trust instrument provides that, on dissolution of the
trust, assets of the trust may not be paid other than to plans
which have participated in the plan or, in the case of a trust
established under section 4223(h) of such Act, to plans with
respect to which employers have participated in the fund.
(23) Any association organized before 1880 more than 75 percent
of the members of which are present or past members of the Armed
Forces and a principal purpose of which is to provide insurance
and other benefits to veterans or their dependents.
(24) A trust described in section 4049 of the Employee
Retirement Income Security Act of 1974 (as in effect on the date
of the enactment of the Single-Employer Pension Plan Amendments
Act of 1986).
(25)(A) Any corporation or trust which -
(i) has no more than 35 shareholders or beneficiaries,
(ii) has only 1 class of stock or beneficial interest, and
(iii) is organized for the exclusive purposes of -
(I) acquiring real property and holding title to, and
collecting income from, such property, and
(II) remitting the entire amount of income from such
property (less expenses) to 1 or more organizations described
in subparagraph (C) which are shareholders of such
corporation or beneficiaries of such trust.
For purposes of clause (iii), the term "real property" shall not
include any interest as a tenant in common (or similar interest)
and shall not include any indirect interest.
(B) A corporation or trust shall be described in subparagraph
(A) without regard to whether the corporation or trust is
organized by 1 or more organizations described in subparagraph
(C).
(C) An organization is described in this subparagraph if such
organization is -
(i) a qualified pension, profit sharing, or stock bonus plan
that meets the requirements of section 401(a),
(ii) a governmental plan (within the meaning of section
414(d)),
(iii) the United States, any State or political subdivision
thereof, or any agency or instrumentality of any of the
foregoing, or
(iv) any organization described in paragraph (3).
(D) A corporation or trust shall in no event be treated as
described in subparagraph (A) unless such corporation or trust
permits its shareholders or beneficiaries -
(i) to dismiss the corporation's or trust's investment
adviser, following reasonable notice, upon a vote of the
shareholders or beneficiaries holding a majority of interest in
the corporation or trust, and
(ii) to terminate their interest in the corporation or trust
by either, or both, of the following alternatives, as
determined by the corporation or trust:
(I) by selling or exchanging their stock in the corporation
or interest in the trust (subject to any Federal or State
securities law) to any organization described in subparagraph
(C) so long as the sale or exchange does not increase the
number of shareholders or beneficiaries in such corporation
or trust above 35, or
(II) by having their stock or interest redeemed by the
corporation or trust after the shareholder or beneficiary has
provided 90 days notice to such corporation or trust.
(E)(i) For purposes of this title -
(I) a corporation which is a qualified subsidiary shall not
be treated as a separate corporation, and
(II) all assets, liabilities, and items of income, deduction,
and credit of a qualified subsidiary shall be treated as
assets, liabilities, and such items (as the case may be) of the
corporation or trust described in subparagraph (A).
(ii) For purposes of this subparagraph, the term "qualified
subsidiary" means any corporation if, at all times during the
period such corporation was in existence, 100 percent of the
stock of such corporation is held by the corporation or trust
described in subparagraph (A).
(iii) For purposes of this subtitle, if any corporation which
was a qualified subsidiary ceases to meet the requirements of
clause (ii), such corporation shall be treated as a new
corporation acquiring all of its assets (and assuming all of its
liabilities) immediately before such cessation from the
corporation or trust described in subparagraph (A) in exchange
for its stock.
(F) For purposes of subparagraph (A), the term "real property"
includes any personal property which is leased under, or in
connection with, a lease of real property, but only if the rent
attributable to such personal property (determined under the
rules of section 856(d)(1)) for the taxable year does not exceed
15 percent of the total rent for the taxable year attributable to
both the real and personal property leased under, or in
connection with, such lease.
(G)(i) An organization shall not be treated as failing to be
described in this paragraph merely by reason of the receipt of
any otherwise disqualifying income which is incidentally derived
from the holding of real property.
(ii) Clause (i) shall not apply if the amount of gross income
described in such clause exceeds 10 percent of the organization's
gross income for the taxable year unless the organization
establishes to the satisfaction of the Secretary that the receipt
of gross income described in clause (i) in excess of such
limitation was inadvertent and reasonable steps are being taken
to correct the circumstances giving rise to such income.
(26) Any membership organization if -
(A) such organization is established by a State exclusively
to provide coverage for medical care (as defined in section
213(d)) on a not-for-profit basis to individuals described in
subparagraph (B) through -
(i) insurance issued by the organization, or
(ii) a health maintenance organization under an arrangement
with the organization,
(B) the only individuals receiving such coverage through the
organization are individuals -
(i) who are residents of such State, and
(ii) who, by reason of the existence or history of a
medical condition -
(I) are unable to acquire medical care coverage for such
condition through insurance or from a health maintenance
organization, or
(II) are able to acquire such coverage only at a rate
which is substantially in excess of the rate for such
coverage through the membership organization,
(C) the composition of the membership in such organization is
specified by such State, and
(D) no part of the net earnings of the organization inures to
the benefit of any private shareholder or individual.
A spouse and any qualifying child (as defined in section 24(c))
of an individual described in subparagraph (B) (without regard to
this sentence) shall be treated as described in subparagraph (B).
(27)(A) Any membership organization if -
(i) such organization is established before June 1, 1996, by
a State exclusively to reimburse its members for losses arising
under workmen's compensation acts,
(ii) such State requires that the membership of such
organization consist of -
(I) all persons who issue insurance covering workmen's
compensation losses in such State, and
(II) all persons and governmental entities who self-insure
against such losses, and
(iii) such organization operates as a non-profit organization
by -
(I) returning surplus income to its members or workmen's
compensation policyholders on a periodic basis, and
(II) reducing initial premiums in anticipation of
investment income.
(B) Any organization (including a mutual insurance company) if
-
(i) such organization is created by State law and is
organized and operated under State law exclusively to -
(I) provide workmen's compensation insurance which is
required by State law or with respect to which State law
provides significant disincentives if such insurance is not
purchased by an employer, and
(II) provide related coverage which is incidental to
workmen's compensation insurance,
(ii) such organization must provide workmen's compensation
insurance to any employer in the State (for employees in the
State or temporarily assigned out-of-State) which seeks such
insurance and meets other reasonable requirements relating
thereto,
(iii)(I) the State makes a financial commitment with respect
to such organization either by extending the full faith and
credit of the State to the initial debt of such organization or
by providing the initial operating capital of such
organization, and (II) in the case of periods after the date of
enactment of this subparagraph, the assets of such organization
revert to the State upon dissolution or State law does not
permit the dissolution of such organization, and
(iv) the majority of the board of directors or oversight body
of such organization are appointed by the chief executive
officer or other executive branch official of the State, by the
State legislature, or by both.
(28) The National Railroad Retirement Investment Trust
established under section 15(j) of the Railroad Retirement Act of
1974.
(d) Religious and apostolic organizations
The following organizations are referred to in subsection (a):
Religious or apostolic associations or corporations, if such
associations or corporations have a common treasury or community
treasury, even if such associations or corporations engage in
business for the common benefit of the members, but only if the
members thereof include (at the time of filing their returns) in
their gross income their entire pro rata shares, whether
distributed or not, of the taxable income of the association or
corporation for such year. Any amount so included in the gross
income of a member shall be treated as a dividend received.
(e) Cooperative hospital service organizations
For purposes of this title, an organization shall be treated as
an organization organized and operated exclusively for charitable
purposes, if -
(1) such organization is organized and operated solely -
(A) to perform, on a centralized basis, one or more of the
following services which, if performed on its own behalf by a
hospital which is an organization described in subsection
(c)(3) and exempt from taxation under subsection (a), would
constitute activities in exercising or performing the purpose
or function constituting the basis for its exemption: data
processing, purchasing (including the purchasing of insurance
on a group basis), warehousing, billing and collection
(including the purchase of patron accounts receivable on a
recourse basis), food, clinical, industrial engineering,
laboratory, printing, communications, record center, and
personnel (including selection, testing, training, and
education of personnel) services; and
(B) to perform such services solely for two or more hospitals
each of which is -
(i) an organization described in subsection (c)(3) which is
exempt from taxation under subsection (a),
(ii) a constituent part of an organization described in
subsection (c)(3) which is exempt from taxation under
subsection (a) and which, if organized and operated as a
separate entity, would constitute an organization described
in subsection (c)(3), or
(iii) owned and operated by the United States, a State, the
District of Columbia, or a possession of the United States,
or a political subdivision or an agency or instrumentality of
any of the foregoing;
(2) such organization is organized and operated on a
cooperative basis and allocates or pays, within 8 1/2 months
after the close of its taxable year, all net earnings to patrons
on the basis of services performed for them; and
(3) if such organization has capital stock, all of such stock
outstanding is owned by its patrons.
For purposes of this title, any organization which, by reason of
the preceding sentence, is an organization described in subsection
(c)(3) and exempt from taxation under subsection (a), shall be
treated as a hospital and as an organization referred to in section
170(b)(1)(A)(iii).
(f) Cooperative service organizations of operating educational
organizations
For purposes of this title, if an organization is -
(1) organized and operated solely to hold, commingle, and
collectively invest and reinvest (including arranging for and
supervising the performance by independent contractors of
investment services related thereto) in stocks and securities,
the moneys contributed thereto by each of the members of such
organization, and to collect income therefrom and turn over the
entire amount thereof, less expenses, to such members,
(2) organized and controlled by one or more such members, and
(3) comprised solely of members that are organizations
described in clause (ii) or (iv) of section 170(b)(1)(A) -
(A) which are exempt from taxation under subsection (a), or
(B) the income of which is excluded from taxation under
section 115(a),
then such organization shall be treated as an organization
organized and operated exclusively for charitable purposes.
(g) Definition of agricultural
For purposes of subsection (c)(5), the term "agricultural"
includes the art or science of cultivating land, harvesting crops
or aquatic resources, or raising livestock.
(h) Expenditures by public charities to influence legislation
(1) General rule
In the case of an organization to which this subsection
applies, exemption from taxation under subsection (a) shall be
denied because a substantial part of the activities of such
organization consists of carrying on propaganda, or otherwise
attempting, to influence legislation, but only if such
organization normally -
(A) makes lobbying expenditures in excess of the lobbying
ceiling amount for such organization for each taxable year, or
(B) makes grass roots expenditures in excess of the grass
roots ceiling amount for such organization for each taxable
year.
(2) Definitions
For purposes of this subsection -
(A) Lobbying expenditures
The term "lobbying expenditures" means expenditures for the
purpose of influencing legislation (as defined in section
4911(d)).
(B) Lobbying ceiling amount
The lobbying ceiling amount for any organization for any
taxable year is 150 percent of the lobbying nontaxable amount
for such organization for such taxable year, determined under
section 4911.
(C) Grass roots expenditures
The term "grass roots expenditures" means expenditures for
the purpose of influencing legislation (as defined in section
4911(d) without regard to paragraph (1)(B) thereof).
(D) Grass roots ceiling amount
The grass roots ceiling amount for any organization for any
taxable year is 150 percent of the grass roots nontaxable
amount for such organization for such taxable year, determined
under section 4911.
(3) Organizations to which this subsection applies
This subsection shall apply to any organization which has
elected (in such manner and at such time as the Secretary may
prescribe) to have the provisions of this subsection apply to
such organization and which, for the taxable year which includes
the date the election is made, is described in subsection (c)(3)
and -
(A) is described in paragraph (4), and
(B) is not a disqualified organization under paragraph (5).
(4) Organizations permitted to elect to have this subsection
apply
An organization is described in this paragraph if it is
described in -
(A) section 170(b)(1)(A)(ii) (relating to educational
institutions),
(B) section 170(b)(1)(A)(iii) (relating to hospitals and
medical research organizations),
(C) section 170(b)(1)(A)(iv) (relating to organizations
supporting government schools),
(D) section 170(b)(1)(A)(vi) (relating to organizations
publicly supported by charitable contributions),
(E) section 509(a)(2) (relating to organizations publicly
supported by admissions, sales, etc.), or
(F) section 509(a)(3) (relating to organizations supporting
certain types of public charities) except that for purposes of
this subparagraph, section 509(a)(3) shall be applied without
regard to the last sentence of section 509(a).
(5) Disqualified organizations
For purposes of paragraph (3) an organization is a disqualified
organization if it is -
(A) described in section 170(b)(1)(A)(i) (relating to
churches),
(B) an integrated auxiliary of a church or of a convention or
association of churches, or
(C) a member of an affiliated group of organizations (within
the meaning of section 4911(f)(2)) if one or more members of
such group is described in subparagraph (A) or (B).
(6) Years for which election is effective
An election by an organization under this subsection shall be
effective for all taxable years of such organization which -
(A) end after the date the election is made, and
(B) begin before the date the election is revoked by such
organization (under regulations prescribed by the Secretary).
(7) No effect on certain organizations
With respect to any organization for a taxable year for which -
(A) such organization is a disqualified organization (within
the meaning of paragraph (5)), or
(B) an election under this subsection is not in effect for
such organization,
nothing in this subsection or in section 4911 shall be construed
to affect the interpretation of the phrase, "no substantial part
of the activities of which is carrying on propaganda, or
otherwise attempting, to influence legislation," under subsection
(c)(3).
(8) Affiliated organizations
For rules regarding affiliated organizations, see section
4911(f).
(i) Prohibition of discrimination by certain social clubs
Notwithstanding subsection (a), an organization which is
described in subsection (c)(7) shall not be exempt from taxation
under subsection (a) for any taxable year if, at any time during
such taxable year, the charter, bylaws, or other governing
instrument, of such organization or any written policy statement of
such organization contains a provision which provides for
discrimination against any person on the basis of race, color, or
religion. The preceding sentence to the extent it relates to
discrimination on the basis of religion shall not apply to -
(1) an auxiliary of a fraternal beneficiary society if such
society -
(A) is described in subsection (c)(8) and exempt from tax
under subsection (a), and
(B) limits its membership to the members of a particular
religion, or
(2) a club which in good faith limits its membership to the
members of a particular religion in order to further the
teachings or principles of that religion, and not to exclude
individuals of a particular race or color.
(j) Special rules for certain amateur sports organizations
(1) In general
In the case of a qualified amateur sports organization -
(A) the requirement of subsection (c)(3) that no part of its
activities involve the provision of athletic facilities or
equipment shall not apply, and
(B) such organization shall not fail to meet the requirements
of subsection (c)(3) merely because its membership is local or
regional in nature.
(2) Qualified amateur sports organization defined
For purposes of this subsection, the term "qualified amateur
sports organization" means any organization organized and
operated exclusively to foster national or international amateur
sports competition if such organization is also organized and
operated primarily to conduct national or international
competition in sports or to support and develop amateur athletes
for national or international competition in sports.
(k) Treatment of certain organizations providing child care
For purposes of subsection (c)(3) of this section and sections
170(c)(2), 2055(a)(2), and 2522(a)(2), the term "educational
purposes" includes the providing of care of children away from
their homes if -
(1) substantially all of the care provided by the organization
is for purposes of enabling individuals to be gainfully employed,
and
(2) the services provided by the organization are available to
the general public.
(l) Government corporations exempt under subsection (c)(1)
For purposes of subsection (c)(1), the following organizations
are described in this subsection:
(1) The Central Liquidity Facility established under title III
of the Federal Credit Union Act (12 U.S.C. 1795 et seq.).
(2) The Resolution Trust Corporation established under section
21A of the Federal Home Loan Bank Act.
(3) The Resolution Funding Corporation established under
section 21B of the Federal Home Loan Bank Act.
(m) Certain organizations providing commercial-type insurance not
exempt from tax
(1) Denial of tax exemption where providing commercial-type
insurance is substantial part of activities
An organization described in paragraph (3) or (4) of subsection
(c) shall be exempt from tax under subsection (a) only if no
substantial part of its activities consists of providing
commercial-type insurance.
(2) Other organizations taxed as insurance companies on insurance
business
In the case of an organization described in paragraph (3) or
(4) of subsection (c) which is exempt from tax under subsection
(a) after the application of paragraph (1) of this subsection -
(A) the activity of providing commercial-type insurance shall
be treated as an unrelated trade or business (as defined in
section 513), and
(B) in lieu of the tax imposed by section 511 with respect to
such activity, such organization shall be treated as an
insurance company for purposes of applying subchapter L with
respect to such activity.
(3) Commercial-type insurance
For purposes of this subsection, the term "commercial-type
insurance" shall not include -
(A) insurance provided at substantially below cost to a class
of charitable recipients,
(B) incidental health insurance provided by a health
maintenance organization of a kind customarily provided by such
organizations,
(C) property or casualty insurance provided (directly or
through an organization described in section 414(e)(3)(B)(ii))
by a church or convention or association of churches for such
church or convention or association of churches,
(D) providing retirement or welfare benefits (or both) by a
church or a convention or association of churches (directly or
through an organization described in section 414(e)(3)(A) or
414(e)(3)(B)(ii)) for the employees (including employees
described in section 414(e)(3)(B)) of such church or convention
or association of churches or the beneficiaries of such
employees, and
(E) charitable gift annuities.
(4) Insurance includes annuities
For purposes of this subsection, the issuance of annuity
contracts shall be treated as providing insurance.
(5) Charitable gift annuity
For purposes of paragraph (3)(E), the term "charitable gift
annuity" means an annuity if -
(A) a portion of the amount paid in connection with the
issuance of the annuity is allowable as a deduction under
section 170 or 2055, and
(B) the annuity is described in section 514(c)(5) (determined
as if any amount paid in cash in connection with such issuance
were property).
(n) Charitable risk pools
(1) In general
For purposes of this title -
(A) a qualified charitable risk pool shall be treated as an
organization organized and operated exclusively for charitable
purposes, and
(B) subsection (m) shall not apply to a qualified charitable
risk pool.
(2) Qualified charitable risk pool
For purposes of this subsection, the term "qualified charitable
risk pool" means any organization -
(A) which is organized and operated solely to pool insurable
risks of its members (other than risks related to medical
malpractice) and to provide information to its members with
respect to loss control and risk management,
(B) which is comprised solely of members that are
organizations described in subsection (c)(3) and exempt from
tax under subsection (a), and
(C) which meets the organizational requirements of paragraph
(3).
(3) Organizational requirements
An organization (hereinafter in this subsection referred to as
the "risk pool") meets the organizational requirements of this
paragraph if -
(A) such risk pool is organized as a nonprofit organization
under State law provisions authorizing risk pooling
arrangements for charitable organizations,
(B) such risk pool is exempt from any income tax imposed by
the State (or will be so exempt after such pool qualifies as an
organization exempt from tax under this title),
(C) such risk pool has obtained at least $1,000,000 in
startup capital from nonmember charitable organizations,
(D) such risk pool is controlled by a board of directors
elected by its members, and
(E) the organizational documents of such risk pool require
that -
(i) each member of such pool shall at all times be an
organization described in subsection (c)(3) and exempt from
tax under subsection (a),
(ii) any member which receives a final determination that
it no longer qualifies as an organization described in
subsection (c)(3) shall immediately notify the pool of such
determination and the effective date of such determination,
and
(iii) each policy of insurance issued by the risk pool
shall provide that such policy will not cover the insured
with respect to events occurring after the date such final
determination was issued to the insured.
An organization shall not cease to qualify as a qualified
charitable risk pool solely by reason of the failure of any of
its members to continue to be an organization described in
subsection (c)(3) if, within a reasonable period of time after
such pool is notified as required under subparagraph (E)(ii),
such pool takes such action as may be reasonably necessary to
remove such member from such pool.
(4) Other definitions
For purposes of this subsection -
(A) Startup capital
The term "startup capital" means any capital contributed to,
and any program-related investments (within the meaning of
section 4944(c)) made in, the risk pool before such pool
commences operations.
(B) Nonmember charitable organization
The term "nonmember charitable organization" means any
organization which is described in subsection (c)(3) and exempt
from tax under subsection (a) and which is not a member of the
risk pool and does not benefit (directly or indirectly) from
the insurance coverage provided by the pool to its members.
(o) Treatment of hospitals participating in provider-sponsored
organizations
An organization shall not fail to be treated as organized and
operated exclusively for a charitable purpose for purposes of
subsection (c)(3) solely because a hospital which is owned and
operated by such organization participates in a provider-sponsored
organization (as defined in section 1855(d) of the Social Security
Act), whether or not the provider-sponsored organization is exempt
from tax. For purposes of subsection (c)(3), any person with a
material financial interest in such a provider-sponsored
organization shall be treated as a private shareholder or
individual with respect to the hospital.
(p) Suspension of tax-exempt status of terrorist organizations
(1) In general
The exemption from tax under subsection (a) with respect to any
organization described in paragraph (2), and the eligibility of
any organization described in paragraph (2) to apply for
recognition of exemption under subsection (a), shall be suspended
during the period described in paragraph (3).
(2) Terrorist organizations
An organization is described in this paragraph if such
organization is designated or otherwise individually identified -
(A) under section 212(a)(3)(B)(vi)(II) or 219 of the
Immigration and Nationality Act as a terrorist organization or
foreign terrorist organization,
(B) in or pursuant to an Executive order which is related to
terrorism and issued under the authority of the International
Emergency Economic Powers Act or section 5 of the United
Nations Participation Act of 1945 for the purpose of imposing
on such organization an economic or other sanction, or
(C) in or pursuant to an Executive order issued under the
authority of any Federal law if -
(i) the organization is designated or otherwise
individually identified in or pursuant to such Executive
order as supporting or engaging in terrorist activity (as
defined in section 212(a)(3)(B) of the Immigration and
Nationality Act) or supporting terrorism (as defined in
section 140(d)(2) of the Foreign Relations Authorization Act,
Fiscal Years 1988 and 1989); and
(ii) such Executive order refers to this subsection.
(3) Period of suspension
With respect to any organization described in paragraph (2),
the period of suspension -
(A) begins on the later of -
(i) the date of the first publication of a designation or
identification described in paragraph (2) with respect to
such organization, or
(ii) the date of the enactment of this subsection, and
(B) ends on the first date that all designations and
identifications described in paragraph (2) with respect to such
organization are rescinded pursuant to the law or Executive
order under which such designation or identification was made.
(4) Denial of deduction
No deduction shall be allowed under any provision of this
title, including sections 170, 545(b)(2), 556(b)(2), 642(c),
2055, 2106(a)(2), and 2522, with respect to any contribution to
an organization described in paragraph (2) during the period
described in paragraph (3).
(5) Denial of administrative or judicial challenge of suspension
or denial of deduction
Notwithstanding section 7428 or any other provision of law, no
organization or other person may challenge a suspension under
paragraph (1), a designation or identification described in
paragraph (2), the period of suspension described in paragraph
(3), or a denial of a deduction under paragraph (4) in any
administrative or judicial proceeding relating to the Federal tax
liability of such organization or other person.
(6) Erroneous designation
(A) In general
If -
(i) the tax exemption of any organization described in
paragraph (2) is suspended under paragraph (1),
(ii) each designation and identification described in
paragraph (2) which has been made with respect to such
organization is determined to be erroneous pursuant to the
law or Executive order under which such designation or
identification was made, and
(iii) the erroneous designations and identifications result
in an overpayment of income tax for any taxable year by such
organization,
credit or refund (with interest) with respect to such
overpayment shall be made.
(B) Waiver of limitations
If the credit or refund of any overpayment of tax described
in subparagraph (A)(iii) is prevented at any time by the
operation of any law or rule of law (including res judicata),
such credit or refund may nevertheless be allowed or made if
the claim therefor is filed before the close of the 1-year
period beginning on the date of the last determination
described in subparagraph (A)(ii).
(7) Notice of suspensions
If the tax exemption of any organization is suspended under
this subsection, the Internal Revenue Service shall update the
listings of tax-exempt organizations and shall publish
appropriate notice to taxpayers of such suspension and of the
fact that contributions to such organization are not deductible
during the period of such suspension.
(q) Cross reference
For nonexemption of Communist-controlled organizations, see
section 11(b) of the Internal Security Act of 1950 (64 Stat.
997; 50 U.S.C. 790(b)).
-SOURCE-
(Aug. 16, 1954, ch. 736, 68A Stat. 163; Mar. 13, 1956, ch. 83, Sec.
5(2), 70 Stat. 49; Pub. L. 86-428, Sec. 1, Apr. 22, 1960, 74 Stat.
54; Pub. L. 86-667, Sec. 1, July 14, 1960, 74 Stat. 534; Pub. L.
87-834, Sec. 8(d), Oct. 16, 1962, 76 Stat. 997; Pub. L. 89-352,
Sec. 1, Feb. 2, 1966, 80 Stat. 4; Pub. L. 89-800, Sec. 6(a), Nov.
8, 1966, 80 Stat. 1515; Pub. L. 90-364, title I, Sec. 109(a), June
28, 1968, 82 Stat. 269; Pub. L. 91-172, title I, Secs.
101(j)(3)-(6), 121(b)(5)(A), (6)(A), Dec. 30, 1969, 83 Stat. 526,
527, 541; Pub. L. 91-618, Sec. 1, Dec. 31, 1970, 84 Stat. 1855;
Pub. L. 92-418, Sec. 1(a), Aug. 29, 1972, 86 Stat. 656; Pub. L.
93-310, Sec. 3(a), June 8, 1974, 88 Stat. 235; Pub. L. 93-625, Sec.
10(c), Jan. 3, 1975, 88 Stat. 2119; Pub. L. 94-455, title XIII,
Secs. 1307(a)(1), (d)(1)(A), 1312(a), 1313(a), title XIX, Sec.
1906(b)(13)(A), title XXI, Secs. 2113(a), 2134(b), Oct. 4, 1976, 90
Stat. 1720, 1727, 1730, 1834, 1907, 1927; Pub. L. 94-568, Secs.
1(a), 2(a), Oct. 20, 1976, 90 Stat. 2697; Pub. L. 95-227, Sec.
4(a), Feb. 10, 1978, 92 Stat. 15; Pub. L. 95-345, Sec. 1(a), Aug.
15, 1978, 92 Stat. 481; Pub. L. 95-600, title VII, Sec. 703(b)(2),
(g)(2)(A), (B), Nov. 6, 1978, 92 Stat. 2939, 2940; Pub. L. 96-222,
title I, Sec. 108(b)(2)(B), Apr. 1, 1980, 94 Stat. 226; Pub. L.
96-364, title II, Sec. 209(a), Sept. 26, 1980, 94 Stat. 1290; Pub.
L. 96-601, Sec. 3(a), Dec. 24, 1980, 94 Stat. 3496; Pub. L. 96-605,
title I, Sec. 106(a), Dec. 28, 1980, 94 Stat. 3523; Pub. L. 97-119,
title I, Sec. 103(c)(1), Dec. 29, 1981, 95 Stat. 1638; Pub. L.
97-248, title II, Sec. 286(a), title III, Sec. 354(a), (b), Sept.
3, 1982, 96 Stat. 569, 640, 641; Pub. L. 97-448, title III, Sec.
306(b)(5), Jan. 12, 1983, 96 Stat. 2406; Pub. L. 98-369, div. A,
title X, Secs. 1032(a), 1079, div. B, title VIII, Sec. 2813(b),
July 18, 1984, 98 Stat. 1033, 1056, 1206; Pub. L. 99-272, title XI,
Sec. 11012(b), Apr. 7, 1986, 100 Stat. 260; Pub. L. 99-514, title
X, Secs. 1012(a), 1024(b), title XI, Secs. 1109(a), 1114(b)(14),
title XVI, Sec. 1603(a), title XVIII, Secs. 1879(k)(1), 1899A(15),
Oct. 22, 1986, 100 Stat. 2390, 2406, 2435, 2451, 2768, 2909, 2959;
Pub. L. 100-203, title X, Sec. 10711(a)(2), Dec. 22, 1987, 101
Stat. 1330-464; Pub. L. 100-647, title I, Secs. 1010(b)(4),
1011(c)(7)(D), 1016(a)(1)(A), (2)-(4), 1018(u)(14), (15), (34),
title II, Sec. 2003(a)(1), (2), title VI, Sec. 6202(a), Nov. 10,
1988, 102 Stat. 3451, 3458, 3573, 3574, 3590, 3592, 3597, 3598,
3730; Pub. L. 101-73, title XIV, Sec. 1402(a), Aug. 9, 1989, 103
Stat. 550; Pub. L. 102-486, title XIX, Sec. 1940(a), Oct. 24, 1992,
106 Stat. 3034; Pub. L. 103-66, title XIII, Sec. 13146(a), (b),
Aug. 10, 1993, 107 Stat. 443; Pub. L. 104-168, title XIII, Sec.
1311(b)(1), July 30, 1996, 110 Stat. 1477; Pub. L. 104-188, title
I, Secs. 1114(a), 1704(j)(5), Aug. 20, 1996, 110 Stat. 1759, 1882;
Pub. L. 104-191, title III, Secs. 341(a), 342(a), Aug. 21, 1996,
110 Stat. 2070; Pub. L. 105-33, title IV, Sec. 4041(a), Aug. 5,
1997, 111 Stat. 360; Pub. L. 105-34, title I, Sec. 101(c), title
IX, Secs. 963(a), (b), 974(a), Aug. 5, 1997, 111 Stat. 799, 892,
898; Pub. L. 105-206, title VI, Sec. 6023(6), (7), July 22, 1998,
112 Stat. 825; Pub. L. 107-16, title VI, Sec. 611(d)(3)(C), June 7,
2001, 115 Stat. 98; Pub. L. 107-90, title II, Sec. 202, Dec. 21,
2001, 115 Stat. 890; Pub. L. 108-121, title I, Secs. 105(a),
108(a), Nov. 11, 2003, 117 Stat. 1338, 1339.)
-STATAMEND-
AMENDMENT OF SECTION
For termination of amendment by section 901 of Pub. L. 107-16,
see Effective and Termination Dates of 2001 Amendments note below.
-REFTEXT-
REFERENCES IN TEXT
Sections 306A, 306B, and 311 of the Rural Electrification Act of
1936, referred to in subsec. (c)(12)(B)(iv), (C)(ii), are
classified to sections 936a and 936b, respectively, of Title 7,
Agriculture. Section 311 of the Act was classified to section 940a
of Title 7 prior to repeal by Pub. L. 104-127, title VII, Sec. 780,
Apr. 4, 1996, 110 Stat. 1151.
The date of the enactment of this subparagraph, referred to in
subsec. (c)(21)(C)(ii), is the date of enactment of Pub. L.
102-486, which was approved Oct. 24, 1992.
The Federal Mine Safety and Health Act of 1977, referred to in
subsec. (c)(21)(D)(i), is Pub. L. 91-173, Dec. 30, 1969, 83 Stat.
742, as amended by Pub. L. 95-164, Nov. 9, 1977, 91 Stat. 1290.
Part C of title IV of the Act is classified generally to part C
(Sec. 931 et seq.) of subchapter IV of chapter 22 of Title 30,
Mineral Lands and Mining. For complete classification of this Act
to the Code, see Short Title note set out under section 801 of
Title 30 and Tables.
Section 4223 of the Employee Retirement Income Security Act of
1974, referred to in subsec. (c)(22)(A)(i), (C), (D), is classified
to section 1403 of Title 29, Labor.
Section 4049 of the Employee Retirement Income Security Act of
1974, referred to in subsec. (c)(24), was classified to section
1349 of Title 29, prior to its repeal by Pub. L. 100-203, title IX,
Sec. 9312(a), Dec. 22, 1987, 101 Stat. 1330-361.
The date of the enactment of the Single-Employer Pension Plan
Amendments Act of 1986, referred to in subsec. (c)(24), is the date
of enactment of title XI of Pub. L. 99-272, which was approved Apr.
7, 1986.
The date of enactment of this subparagraph, referred to in
subsec. (c)(27)(B)(iii)(I), is the date of enactment of Pub. L.
105-34, which was approved Aug. 5, 1997.
Section 15(j) of the Railroad Retirement Act of 1974, referred to
in subsec. (c)(28), is classified to section 231n(j) of Title 45,
Railroads.
The provisions of subsec. (a) of section 115, referred to in
subsec. (f)(3)(B), now comprise section 115 in its entirety,
following the deletion therefrom of the subsec. (a) designation by
section 1901(a)(19) of Pub. L. 94-455.
The Federal Credit Union Act, referred to in subsec. (l)(1), is
act June 26, 1934, ch. 750, 48 Stat. 1216, as amended. Title III of
the Federal Credit Union Act is classified generally to subchapter
III (Sec. 1795 et seq.) of chapter 14 of Title 12, Banks and
Banking. For complete classification of this Act to the Code, see
section 1751 of Title 12 and Tables.
Sections 21A and 21B of the Federal Home Loan Bank Act, referred
to in subsec. (l)(2), (3), are classified to sections 1441a and
1441b, respectively, of Title 12.
Section 1855(d) of the Social Security Act, referred to in
subsec. (o), is classified to section 1395w-25(d) of Title 42, The
Public Health and Welfare.
Sections 212(a)(3)(B) and 219 of the Immigration and Nationality
Act, referred to in subsec. (p)(2)(A), (C)(i), are classified to
sections 1182(a)(3)(B) and 1189, respectively, of Title 8, Aliens
and Nationality.
The International Emergency Economic Powers Act, referred to in
subsec. (p)(2)(B), is title II of Pub. L. 95-223, Dec. 28, 1977, 91
Stat. 1626, as amended, which is classified generally to chapter 35
(Sec. 1701 et seq.) of Title 50, War and National Defense. For
complete classification of this Act to the Code, see Short Title
note set out under section 1701 of Title 50 and Tables.
Section 5 of the United Nations Participation Act of 1945,
referred to in subsec. (p)(2)(B), is classified to section 287c of
Title 22, Foreign Relations and Intercourse.
Section 140(d)(2) of the Foreign Relations Authorization Act,
Fiscal Years 1988 and 1989, referred to in subsec. (p)(2)(C)(i), is
classifed to section 2656f(d)(2) of Title 22, Foreign Relations and
Intercourse.
The date of the enactment of this subsection, referred to in
subsec. (p)(3)(A)(ii), is the date of enactment of Pub. L. 108-121,
which was approved Nov. 11, 2003.
Section 11(b) of the Internal Security Act of 1950 (64 Stat. 997;
50 U.S.C. 790(b)), referred to in subsec. (q), was repealed by Pub.
L. 103-199, title VIII, Sec. 803(1), Dec. 17, 1993, 107 Stat. 2329.
-MISC1-
AMENDMENTS
2003 - Subsec. (c)(19)(B). Pub. L. 108-121, Sec. 105(a),
substituted ", widowers, ancestors, or lineal descendants" for "or
widowers".
Subsecs. (p), (q). Pub. L. 108-121, Sec. 108(a), added subsec.
(p) and redesignated former subsec. (p) as (q).
2001 - Subsec. (c)(18)(D)(iii). Pub. L. 107-16, Secs.
611(d)(3)(C), 901, temporarily struck out "(other than paragraph
(4) thereof)" after "section 402(g)". See Effective and Termination
Dates of 2001 Amendment note below.
Subsec. (c)(28). Pub. L. 107-90 added par. (28).
1998 - Subsec. (n)(3). Pub. L. 105-206, Sec. 6023(6), substituted
"subparagraph (E)(ii)" for "subparagraph (C)(ii)" in concluding
provisions.
Subsec. (o). Pub. L. 105-206, Sec. 6023(7), substituted "section
1855(d)" for "section 1853(e)".
1997 - Subsec. (c)(26). Pub. L. 105-34, Sec. 101(c), inserted
concluding provisions "A spouse and any qualifying child (as
defined in section 24(c)) of an individual described in
subparagraph (B) (without regard to this sentence) shall be treated
as described in subparagraph (B)."
Subsec. (c)(27). Pub. L. 105-34, Sec. 963(a), (b), designated
existing provisions as subpar. (A), redesignated former subpar. (A)
as cl. (i), redesignated subpar. (B) as cl. (ii) and former cls.
(i) and (ii) of subpar. (B) as subcls. (I) and (II), respectively,
of cl. (ii), redesignated subpar. (C) as cl. (iii) and former cls.
(i) and (ii) of subpar. (C) as subcls. (I) and (II), respectively,
of cl. (iii), and added subpar. (B).
Subsec. (e)(1)(A). Pub. L. 105-34, Sec. 974(a), inserted
"(including the purchase of patron accounts receivable on a
recourse basis)" after "billing and collection".
Subsecs. (o), (p). Pub. L. 105-33 added subsec. (o) and
redesignated former subsec. (o) as (p).
1996 - Subsec. (c)(4). Pub. L. 104-168 designated existing
provisions as subpar. (A) and added subpar. (B).
Subsec. (c)(21)(D)(ii)(III). Pub. L. 104-188, Sec. 1704(j)(5),
substituted "section 101(7)" for "section 101(6)" and "1752(7)" for
"1752(6)".
Subsec. (c)(26). Pub. L. 104-191, Sec. 341(a), added par. (26).
Subsec. (c)(27). Pub. L. 104-191, Sec. 342(a), added par. (27).
Subsecs. (n), (o). Pub. L. 104-188, Sec. 1114(a), added subsec.
(n) and redesignated former subsec. (n) as (o).
1993 - Subsec. (c)(2). Pub. L. 103-66, Sec. 13146(b), inserted at
end "Rules similar to the rules of subparagraph (G) of paragraph
(25) shall apply for purposes of this paragraph."
Subsec. (c)(25)(G). Pub. L. 103-66, Sec. 13146(a), added subpar.
(G).
1992 - Subsec. (c)(21). Pub. L. 102-486 amended par. (21)
generally, substituting present provisions consisting of subpars.
(A) to (D) for former provisions consisting of subpars. (A) and
(B).
1989 - Subsec. (l). Pub. L. 101-73 amended subsec. (l) generally.
Prior to amendment, subsec. (l) read as follows: "The organization
described in this subsection is the Central Liquidity Facility
established under title III of the Federal Credit Union Act (12
U.S.C. 1795 et seq.)."
1988 - Subsec. (c)(1). Pub. L. 100-647, Sec. 1018(u)(15),
substituted "Any" for "any".
Subsec. (c)(12)(B)(iv). Pub. L. 100-647, Sec. 2003(a)(1), added
cl. (iv).
Subsec. (c)(12)(C). Pub. L. 100-647, Sec. 2003(a)(2), amended
subpar. (C) generally. Prior to amendment, subpar. (C) read as
follows: "In the case of a mutual or cooperative electric company,
subparagraph (A) shall be applied without taking into account any
income received or accrued from qualified pole rentals."
Subsec. (c)(17)(A)(ii), (iii), (18)(B), (C). Pub. L. 100-647,
Sec. 1018(u)(34), made technical amendments to Pub. L. 99-154, Sec.
1114(b)(14). See 1986 Amendment note below.
Subsec. (c)(18)(D)(iv). Pub. L. 100-647, Sec. 1011(c)(7)(D),
added cl. (iv).
Subsec. (c)(23). Pub. L. 100-647, Sec. 1018(u)(14), substituted
"Any" for "any".
Subsec. (c)(25)(A). Pub. L. 100-647, Sec. 1016(a)(1)(A), inserted
at end "For purposes of clause (iii), the term 'real property'
shall not include any interest as a tenant in common (or similar
interest) and shall not include any indirect interest."
Subsec. (c)(25)(C)(v). Pub. L. 100-647, Sec. 1016(a)(3)(B),
struck out cl. (v) which read as follows: "any organization
described in this paragraph."
Subsec. (c)(25)(D). Pub. L. 100-647, Sec. 1016(a)(2), substituted
"A corporation or trust shall in no event be treated as described
in subparagraph (A) unless such corporation or trust permits its
shareholders or beneficiaries" for "A corporation or trust
described in this paragraph must permit its shareholders or
beneficiaries" in introductory text.
Subsec. (c)(25)(E), (F). Pub. L. 100-647, Sec. 1016(a)(3)(A),
(4), added subpars. (E) and (F).
Subsec. (e)(1)(A). Pub. L. 100-647, Sec. 6202(a), inserted
"(including the purchasing of insurance on a group basis)" after
"purchasing".
Subsec. (m)(3)(E). Pub. L. 100-647, Sec. 1010(b)(4)(A), added
subpar. (E).
Subsec. (m)(5). Pub. L. 100-647, Sec. 1010(b)(4)(B), added par.
(5).
1987 - Subsec. (c)(3). Pub. L. 100-203 inserted "(or in
opposition to)" after "in behalf of".
1986 - Subsec. (c)(1)(A)(i). Pub. L. 99-514, Sec. 1899A(15),
substituted "July 18, 1984" for "the date of the enactment of the
Tax Reform Act of 1984".
Subsec. (c)(14)(B)(iv). Pub. L. 99-514, Sec. 1879(k)(1), added
cl. (iv).
Subsec. (c)(15). Pub. L. 99-514, Sec. 1024(b), amended par. (15)
generally. Prior to amendment, par. (15) read as follows: "Mutual
insurance companies or associations other than life or marine
(including inter-insurers and reciprocal underwriters) if the gross
amount received during the taxable year from the items described in
section 822(b) (other than paragraph (1)(D) thereof) and premiums
(including deposits and assessments) does not exceed $150,000."
Subsec. (c)(17)(A)(ii), (iii), (18)(B), (C). Pub. L. 99-514, Sec.
1114(b)(14), as amended by Pub. L. 100-647, Sec. 1018(u)(34),
substituted "highly compensated employees (within the meaning of
section 414(q))" for "officers, shareholders, persons whose
principal duties consist of supervising the work of other
employees, or highly compensated employees".
Subsec. (c)(18)(D). Pub. L. 99-514, Sec. 1109(a), added subpar.
(D).
Subsec. (c)(24). Pub. L. 99-272 added par. (24).
Subsec. (c)(25). Pub. L. 99-514, Sec. 1603(a), added par. (25).
Subsecs. (m), (n). Pub. L. 99-514, Sec. 1012(a), added subsec.
(m) and redesignated former subsec. (m) as (n).
1984 - Subsec. (c)(1). Pub. L. 98-369, Sec. 2813(b)(2),
designated existing provisions as subpar. (A) and added subpar.
(B).
Subsec. (c)(1)(A). Pub. L. 98-369, Sec. 1079, substituted
provisions referring to corporations exempt from Federal income
taxes under any Act of Congress as amended and supplemented before
July 18, 1984, or under this title without regard to any provision
of law not contained in this title and not contained in a revenue
Act for provisions referring to corporations exempt from Federal
income taxes under any Act of Congress as amended and supplemented.
Subsec. (k). Pub. L. 98-369, Sec. 1032(a), added subsec. (k).
Former subsec. (k) redesignated (l).
Subsec. (l). Pub. L. 98-369, Sec. 2813(b)(1), added subsec. (l).
Former subsec. (l) redesignated (m).
Pub. L. 98-369, Sec. 1032(a), redesignated former subsec. (k) as
(l).
Subsec. (m). Pub. L. 98-369, Sec. 2813(b)(1), redesignated former
subsec. (l) as (m).
1983 - Subsec. (c)(23). Pub. L. 97-448 substituted "75 percent"
for "25 percent".
1982 - Subsec. (c)(19). Pub. L. 97-248, Sec. 354(a)(1),
substituted "past or present members of the Armed Forces of the
United States" for "war veterans" after "A post or organization
of".
Subsec. (c)(19)(B). Pub. L. 97-248, Sec. 354(a)(2), substituted
"past or present members of the Armed Forces of the United States"
for "war veterans" wherever appearing, struck out "veterans (but
not war veterans), or are" after "individuals who are", and
substituted "or of cadets" for "or such individuals" before ",
and".
Subsec. (c)(23). Pub. L. 97-248, Sec. 354(b), added par. (23).
Subsecs. (j), (k). Pub. L. 97-248, Sec. 286(a), added subsec. (j)
and redesignated former subsec. (j) as (k).
1981 - Subsec. (c)(21)(B)(iii). Pub. L. 97-119 substituted
"established under section 9501" for "established under section 3
of the Black Lung Benefits Revenue Act of 1977".
1980 - Subsec. (c)(12). Pub. L. 96-605 designated existing
provision as subpar. (A), struck out provision that, in the case of
any mutual or cooperative telephone company, the 85 per cent or
more income requirement be applied without taking into account any
income received or accrued from a nonmember telephone company for
the performance of communication services which involve members of
such mutual or cooperative telephone company, and added subpars.
(B) to (D).
Subsec. (c)(21). Pub. L. 96-222 substituted "Federal Mine Safety
and Health Act of 1977" for "Federal Coal Mine Health and Safety
Act of 1969".
Subsec. (c)(22). Pub. L. 96-364 added par. (22).
Subsec. (i). Pub. L. 96-601 inserted provision that the
restriction on religious discrimination not apply to an auxiliary
of a fraternal beneficiary society if the society is described in
subsec. (c)(8) of this section, is exempt from income tax under
subsec. (a) of this section, and limits its membership to the
members of a particular religion or to a club which in good faith
limits its membership to the members of a particular religion in
order to further the teachings or principles of that religion, and
not to exclude individuals of a particular race or color.
1978 - Subsec. (c)(12). Pub. L. 95-345 inserted provision
relating to applicability of statutory provisions to mutual or
cooperative telephone company of income received or accrued from a
nonmember telephone company.
Subsec. (c)(20). Pub. L. 95-600, Sec. 703(b)(2), substituted
"this paragraph" for "section 501(c)(20)".
Subsec. (c)(21). Pub. L. 95-227 added par. (21).
Subsecs. (g), (i). Pub. L. 95-600, Sec. 703(g)(2)(B),
redesignated subsec. (g), which was added by section 2(a) of Pub.
L. 94-568, as subsec. (i). Former subsec. (i), relating to cross
reference, redesignated (j).
Subsecs. (i), (j). Pub. L. 95-600, Sec. 703(g)(2)(A), amended
Pub. L. 95-600, Sec. 2(a). See 1976 Amendment note below.
1976 - Subsec. (c)(3). Pub. L. 94-455, Secs. 1313(a),
1307(d)(1)(A), inserted "or to foster national or international
amateur sports competition (but only if no part of its activities
involve the provision of athletic facilities or equipment)" after
"educational purposes" and inserted "(except as otherwise provided
in subsection (h))" after "influence legislation".
Subsec. (c)(7). Pub. L. 94-568, Sec. 1(a), struck out requirement
that clubs be "operated exclusively" for specified purposes but
required that substantially all of club activities be for specified
purposes.
Subsec. (c)(17), (18). Pub. L. 94-455, Sec. 1906(b)(13)(A),
struck out "or his delegate" after "Secretary".
Subsec. (c)(20). Pub. L. 94-455, Sec. 2134(b), added par. (20).
Subsec. (e)(1)(A). Pub. L. 94-455, Sec. 1312(a), inserted
"clinical" after "food".
Subsec. (g). Pub. L. 94-568, Sec. 2(a), added subsec. (g)
relating to prohibition of discrimination by certain social clubs.
Pub. L. 94-455, Sec. 2113(a), added subsec. (g) defining
agricultural. Former subsec. (g) redesignated (h).
Subsec. (h). Pub. L. 94-455, Secs. 1307(a)(1), 2113(a), added
subsec. (h). Former subsec. (g), relating to cross reference,
redesignated (h) and further redesignated (i).
Subsec. (i). Pub. L. 94-568, Sec. 2(a), as amended by Pub. L.
95-600, Sec. 703(g)(2)(A), added subsec. (i). Former subsec. (i)
redesignated (j).
Pub. L. 94-455, Sec. 1307(a)(1), redesignated subsec. (h),
relating to cross reference, as (i).
Subsec. (j). Pub. L. 94-568, Sec. 2(a), as amended by Pub. L.
95-600, Sec. 703(g)(2)(A), redesignated subsec. (i), relating to
cross reference, as (j).
1975 - Subsec. (b). Pub. L. 93-625 inserted references to part VI
of this subchapter.
1974 - Subsecs. (f), (g). Pub. L. 93-310 added subsec. (f) and
redesignated former subsec. (f) as (g).
1972 - Subsec. (c)(19). Pub. L. 92-418 added par. (19).
1970 - Subsec. (c)(13). Pub. L., 91-618 substituted "corporation
chartered solely for the purpose of disposal of bodies by burial or
cremation which is not permitted" for "corporation chartered solely
for burial purposes as a cemetery corporation and is not
permitted".
1969 - Subsec. (a). Pub. L. 91-172, Sec. 101(j)(3), struck out
reference to section 504.
Subsec. (b). Pub. L. 91-172, Sec. 101(j)(4), inserted reference
to certain other activities in heading and to part III in text, and
struck out reference to tax on unrelated income.
Subsec. (c). Pub. L. 91-172, Secs. 101(j)(5), 121(b)(6)(A),
substituted "part IV" for "part III" after "Corporations organized
by an association subject to" and added par. 18.
Subsec. (c)(9). Pub. L. 91-172, Sec. 121(b)(5)(A), inserted
reference to designated beneficiaries and struck out reference to
85 percent or more income of voluntary employees' beneficiary
associations.
Subsec. (c)(10). Pub. L. 91-172, Sec. 121(b)(5)(A), substituted
provisions concerning domestic fraternal societies, orders, or
associations, operating under the lodge system, for provisions
covering voluntary employees' beneficiary associations which would
pay benefits to designated beneficiaries of members.
Subsec. (e). Pub. L. 91-172, Sec. 101(j)(6), substituted "section
170(b)(1)(A)(iii)" for "section 503(b)(5)" in last sentence.
1968 - Subsecs. (e), (f). Pub. L. 90-364 added subsec. (e) and
redesignated former subsec. (e) as (f).
1966 - Subsec. (c)(6). Pub. L. 89-800 inserted reference to
professional football leagues (whether or not administering a
pension fund for football players).
Subsec. (c)(14). Pub. L. 89-352 designated as subpar. (A)
provisions covering credit unions which were formerly set out
preceding subpar. (A), designated as subpar. (B) and clauses (i),
(ii), and (iii) thereunder provisions covering corporation or
associations without capital stock organized before Sept. 1, 1957,
which formerly were set out as provisions preceding subpar. (A) and
as subpars. (A), (B), and (C) respectively, and added subpar. (C).
1962 - Subsec. (c)(15). Pub. L. 87-834 substituted "$150,000" for
"$75,000".
1960 - Subsec. (c)(14). Pub. L. 86-428 substituted "September 1,
1957" for "September 1, 1951".
Subsec. (c)(17). Pub. L. 86-667 added par. (17).
1956 - Subsec. (c)(15). Act Mar. 13, 1956, substituted "the items
described in section 822(b) (other than paragraph (1)(D) thereof)"
for "interest, dividends, rents,".
EFFECTIVE DATE OF 2003 AMENDMENT
Pub. L. 108-121, title I, Sec. 105(b), Nov. 11, 2003, 117 Stat.
1338, provided that: "The amendments made by this section [amending
this section] shall apply to taxable years beginning after the date
of the enactment of this Act [Nov. 11, 2003]."
Pub. L. 108-121, title I, Sec. 108(b), Nov. 11, 2003, 117 Stat.
1341, provided that: "The amendments made by this section [amending
this section] shall apply to designations made before, on, or after
the date of the enactment of this Act [Nov. 11, 2003]."
EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT
Amendment by Pub. L. 107-16 applicable to years beginning after
Dec. 31, 2001, see section 611(i)(1) of Pub. L. 107-16, set out as
a note under section 415 of this title.
Amendment by Pub. L. 107-16 inapplicable to taxable, plan, or
limitation years beginning after Dec. 31, 2010, and the Internal
Revenue Code of 1986 to be applied and administered to such years
as if such amendment had never been enacted, see section 901 of
Pub. L. 107-16, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1997 AMENDMENTS
Amendment by section 101(c) of Pub. L. 105-34 applicable to
taxable years beginning after Dec. 31, 1997, see section 101(e) of
Pub. L. 105-34, set out as an Effective Date note under section 24
of this title.
Section 963(c) of Pub. L. 105-34 provided that: "The amendments
made by this section [amending this section] shall apply to taxable
years beginning after December 31, 1997."
Section 974(b) of Pub. L. 105-34 provided that: "The amendment
made by subsection (a) [amending this section] shall apply to
taxable years beginning after December 31, 1996."
Section 4041(b) of Pub. L. 105-33 provided that: "The amendment
made by subsection (a) [amending this section] shall take effect on
the date of the enactment of this Act [Aug. 5, 1997]."
EFFECTIVE DATE OF 1996 AMENDMENTS
Section 341(b) of Pub. L. 104-191 provided that: "The amendment
made by this section [amending this section] shall apply to taxable
years beginning after December 31, 1996."
Section 342(b) of Pub. L. 104-191 provided that: "The amendment
made by this section [amending this section] shall apply to taxable
years ending after the date of the enactment of this Act [Aug. 21,
1996]."
Section 1114(b) of Pub. L. 104-188 provided that: "The amendment
made by subsection (a) [amending this section] shall apply to
taxable years beginning after the date of the enactment of this Act
[Aug. 20, 1996]."
Section 1311(d)(3) of Pub. L. 104-168 provided that:
"(A) In general. - The amendment made by subsection (b) [amending
this section] shall apply to inurement occurring on or after
September 14, 1995.
"(B) Binding contracts. - The amendment made by subsection (b)
shall not apply to any inurement occurring before January 1, 1997,
pursuant to a written contract which was binding on September 13,
1995, and at all times thereafter before such inurement occurred."
EFFECTIVE DATE OF 1993 AMENDMENT
Section 13146(c) of Pub. L. 103-66 provided that: "The amendments
made by this section [amending this section] shall apply to taxable
years beginning on or after January 1, 1994."
EFFECTIVE DATE OF 1992 AMENDMENT
Amendment by Pub. L. 102-486 applicable to taxable years
beginning after Dec. 31, 1991, see section 1940(d) of Pub. L.
102-486, set out as a note under section 192 of this title.
EFFECTIVE DATE OF 1989 AMENDMENT
Section 1402(b) of Pub. L. 101-73 provided that: "The amendment
made by subsection (a) [amending this section] shall take effect on
the date of the enactment of this Act [Aug. 9, 1989]."
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by section 1011(c)(7)(D) of Pub. L. 100-647 applicable
to plan years beginning after Dec. 31, 1987, with exception in case
of a plan described in section 1105(c)(2) of Pub. L. 99-514, see
section 1011(c)(7)(E) of Pub. L. 100-647, set out as a note under
section 401 of this title.
Section 1016(a)(1)(B) of Pub. L. 100-647 provided that: "The
amendment made by subparagraph (A) [amending this section] shall
apply with respect to property acquired by the organization after
June 10, 1987, except that such amendment shall not apply to any
property acquired after June 10, 1987, pursuant to a binding
written contract in effect on June 10, 1987, and at all times
thereafter before such acquisition."
Amendment by sections 1010(b)(4), 1016(a)(2)-(4), and
1018(u)(14), (15), (34) of Pub. L. 100-647 effective, except as
otherwise provided, as if included in the provision of the Tax
Reform Act of 1986, Pub. L. 99-514, to which such amendment
relates, see section 1019(a) of Pub. L. 100-647, set out as a note
under section 1 of this title.
Section 2003(a)(3) of Pub. L. 100-647 provided that: "The
amendments made by this subsection [amending this section] shall
apply to taxable years ending after the date of the enactment of
the Omnibus Budget Reconciliation Act of 1986 [Oct. 21, 1986]."
Section 6202(b) of Pub. L. 100-647 provided that: "The amendment
made by subsection (a) [amending this section] shall apply to
purchases before, on, or after the date of the enactment of this
Act [Nov. 10, 1988]."
EFFECTIVE DATE OF 1987 AMENDMENT
Amendment by Pub. L. 100-203 applicable with respect to
activities after Dec. 22, 1987, see section 10711(c) of Pub. L.
100-203, set out as a note under section 170 of this title.
EFFECTIVE DATE OF 1986 AMENDMENTS
Amendment by section 1012(a) of Pub. L. 99-514 applicable to
taxable years beginning after Dec. 31, 1986, see section 1012(c) of
Pub. L. 99-514, set out as an Effective Date note under section 833
of this title.
Amendment by section 1024(b) of Pub. L. 99-514 applicable to
taxable years beginning after Dec. 31, 1986, see section 1024(e) of
Pub. L. 99-514, set out as a note under section 831 of this title.
Amendment by section 1109(a) of Pub. L. 99-514 applicable to
taxable years beginning after Dec. 31, 1986, see section 1109(c) of
Pub. L. 99-514, set out as a note under section 219 of this title.
Amendment by section 1114(b)(14) of Pub. L. 99-514 applicable to
years beginning after Dec. 31, 1986, see section 1114(c)(1) of Pub.
L. 99-514, set out as a note under section 414 of this title.
Section 1603(c) of Pub. L. 99-514 provided that: "The amendments
made by this section [amending this section and section 514 of this
title] shall apply to taxable years beginning after December 31,
1986."
Section 1879(k)(2) of Pub. L. 99-514 provided that: "The
amendments made by this subsection [amending this section] shall
apply to taxable years ending after August 13, 1981."
Amendment by Pub. L. 99-272 effective Jan. 1, 1986, with certain
exceptions, see section 11019 of Pub. L. 99-272, set out as a note
under section 1341 of Title 29, Labor.
EFFECTIVE DATE OF 1984 AMENDMENT
Amendment by section 1032 of Pub. L. 98-369 applicable to taxable
years beginning after July 18, 1984, see section 1032(c) of Pub. L.
98-369, set out as a note under section 170 of this title.
Amendment by section 2813(b) of Pub. L. 98-369 effective Oct. 1,
1979, see section 2813(c) of Pub. L. 98-369, set out as an
Effective Date note under section 1795k of Title 12, Banks and
Banking.
EFFECTIVE DATE OF 1983 AMENDMENT
Amendment by Pub. L. 97-448 effective as if included in the
provisions of the Tax Equity and Fiscal Responsibility Act of 1982,
Pub. L. 97-248, to which such amendment relates, see section 311(d)
of Pub. L. 97-448, set out as a note under section 31 of this
title.
EFFECTIVE DATE OF 1982 AMENDMENT
Section 286(c) of Pub. L. 97-248 provided that: "The amendments
made by this section [amending this section and sections 170, 2055,
and 2522 of this title] shall take effect on October 5, 1976."
Section 354(c) of Pub. L. 97-248 provided that: "The amendments
made by subsections (a) and (b) [amending this section] shall apply
to taxable years beginning after the date of the enactment of this
Act [Sept. 3, 1982]."
EFFECTIVE DATE OF 1981 AMENDMENT
Amendment by Pub. L. 97-119 effective Jan. 1, 1982, see section
103(d)(1) of Pub. L. 97-119, set out as an Effective Date note
under section 9501 of this title.
EFFECTIVE DATE OF 1980 AMENDMENTS
Section 106(c)(1) of Pub. L. 96-605, as amended by Pub. L.
99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: "The
amendments made by subsection (a) [amending this section] shall
apply to all taxable years to which the Internal Revenue Code of
1986 [formerly I.R.C. 1954] applies."
Section 3(b) of Pub. L. 96-601 provided that: "The amendment made
by subsection (a) [amending this section] shall apply to taxable
years beginning after October 20, 1976."
Amendment by Pub. L. 96-364 applicable to taxable years ending
after Sept. 26, 1980, see section 210(c) of Pub. L. 96-364, set out
as an Effective Date note under section 418 of this title.
Amendment by Pub. L. 96-222 effective, except as otherwise
provided, as if it had been included in the provisions of the
Revenue Act of 1978, Pub. L. 95-600, to which such amendment
relates, see section 201 of Pub. L. 96-222, set out as an Effective
Date of 1980 Amendment note under section 32 of this title.
EFFECTIVE DATE OF 1978 AMENDMENTS
Amendment by section 703(b)(2), (g)(2)(B) of Pub. L. 95-600
effective on Oct. 4, 1976, see section 703(r) of Pub. L. 95-600,
set out as a note under section 46 of this title.
Section 703(g)(2)(C) of Pub. L. 95-600 provided that: "The
amendments made by this paragraph [amending this section] shall
take effect on October 20, 1976, as if included in Public Law
94-568."
Section 1(b) of Pub. L. 95-345 provided that: "The amendment made
by subsection (a) [amending this section] shall apply to taxable
years beginning after December 31, 1974."
Amendment by Pub. L. 95-227 applicable with respect to
contributions, acts, and expenditures made after Dec. 31, 1977, in
and for taxable years beginning after such date, see section 4(f)
of Pub. L. 95-227, set out as a note under section 192 of this
title.
EFFECTIVE DATE OF 1976 AMENDMENTS
Section 1(d) of Pub. L. 94-568 provided that: "The amendments
made by this section [amending this section and sections 277 and
512 of this title] shall apply to taxable years beginning after the
date of the enactment of this Act [Oct. 20, 1976]."
Section 2(b) of Pub. L. 94-568 provided that: "The amendment made
by subsection (a) [amending this section] shall apply to taxable
years beginning after the date of the enactment of this Act [Oct.
20, 1976]."
Section 1307(e) of Pub. L. 94-455 provided that: "The amendments
made by this section [amending this section and sections 170, 275,
2055, 2106, 2522, 6104, 6161, 6201, 6211, 6212, 6213, 6214, 6344,
6501, 6512, 6601, and 7422 of this title and enacting sections 504
and 4911 of this title] shall apply -
"(1) except as otherwise specified in paragraph (2), in the
case of amendments to subtitle A, to taxable years beginning
after December 31, 1976;
"(2) in the case of the amendments made by subsection (a)(2)
[enacting section 504 of this title], to activities occurring
after the date of the enactment of this Act [Oct. 4, 1976];
"(3) in the case of amendments to chapter 11, to the estates of
decedents dying after December 31, 1976;
"(4) in the case of amendments to chapter 12, to gifts in
calendar years beginning after December 31, 1976;
"(5) in the case of amendments to subtitle D, to taxable years
beginning after December 31, 1976; and
"(6) in the case of amendments to subtitle F, on and after the
date of the enactment of this Act [Oct. 4, 1976]."
Section 1312(b) of Pub. L. 94-455 provided that: "The amendment
made by this section [amending this section] shall apply to taxable
years ending after December 31, 1976."
Section 1313(d) of Pub. L. 94-455 provided that: "The amendments
made by this section [amending this section and sections 170, 2055,
and 2522 of this title] shall apply on the day following the date
of the enactment of this Act [Oct. 4, 1976]."
Section 2113(b) of Pub. L. 94-455 provided that: "The amendment
made by this section [amending this section] applies to taxable
years ending after December 31, 1975."
EFFECTIVE DATE OF 1975 AMENDMENT
Amendment by Pub. L. 93-625 applicable to taxable years beginning
after Dec. 31, 1974, see section 10(e) of Pub. L. 93-625, set out
as an Effective Date note under section 527 of this title.
EFFECTIVE DATE OF 1974 AMENDMENT
Section 3(b) of Pub. L. 93-310 provided that: "The amendments
made by this section [amending this section] shall apply to taxable
years ending after December 31, 1973."
EFFECTIVE DATE OF 1972 AMENDMENT
Section 1(c) of Pub. L. 92-418 provided that: "The amendments
made by this section [amending this section and section 512 of this
title] shall apply to taxable years beginning after December 31,
1969."
EFFECTIVE DATE OF 1970 AMENDMENT
Section 2 of Pub L. 91-618 provided that: "The amendment made by
the first section of this Act [amending this section] shall apply
to taxable years ending after the date of enactment of this Act
[Dec. 31, 1970]."
EFFECTIVE DATE OF 1969 AMENDMENT
Amendment by section 101(j)(3) of Pub. L. 91-172 effective Jan.
1, 1970, except that amendment of subsec. (a) of this section
applicable to taxable years beginning after Dec. 31, 1969, see
section 101(k)(1), (2)(B) of Pub. L. 91-172, set out as an
Effective Date note under section 4940 of this title.
Amendment by section 121(b)(5)(A), (6)(A) of Pub. L. 91-172
applicable to taxable years beginning after Dec. 31, 1969, see
section 121(g) of Pub. L. 91-172, set out as a note under section
511 of this title.
EFFECTIVE DATE OF 1968 AMENDMENT
Section 109(b) of Pub. L. 90-364 provided that: "The amendments
made by subsection (a) [amending this section] shall apply to
taxable years ending after the date of the enactment of this Act
[June 28, 1968]."
EFFECTIVE DATE OF 1966 AMENDMENTS
Section 6(c) of Pub. L. 89-800 provided that: "The amendment made
by subsection (a) [amending this section] shall apply to taxable
years ending after the date of the enactment of this Act [Nov. 8,
1966]."
Section 3 of Pub. 89-352 provided in part that: "The amendment
made by the first section of this Act [amending this section] shall
apply to taxable years ending after the date of the enactment of
this Act [Feb. 2, 1966]."
EFFECTIVE DATE OF 1962 AMENDMENT
Section 8(h) of Pub. L. 87-834 provided that: "The amendments
made by this section [enacting sections 823 to 826 of this title,
amending this section and sections 821, 822, 832, 841, 1016, and
1201 of this title, and redesignating former section 823 as section
822(f) of this title] (other than by subsection (f) [amending
section 831 of this title]) shall apply with respect to taxable
years beginning after December 31, 1962."
EFFECTIVE DATE OF 1960 AMENDMENTS
Section 6 of Pub. L. 86-667 provided that:
"(a) Except as provided in subsection (b), the amendments made by
this Act [amending this section and sections 503, 511, 513, and 514
of this title] shall apply to taxable years beginning after
December 31, 1959.
"(b) In the case of loans, the amendments made by section 2 of
this Act [amending section 503 of this title] shall apply only to
loans made, renewed, or continued after December 31, 1959."
Section 2 of Pub. L. 86-428 provided that: "The amendment made by
this Act [amending this section] shall apply only with respect to
taxable years beginning after December 31, 1959."
EFFECTIVE DATE OF 1956 AMENDMENT
Amendment by act Mar. 13, 1956, applicable only to taxable years
beginning after Dec. 31, 1954, see section 6 of act Mar. 13, 1956,
set out as a note under section 316 of this title.
REGULATIONS
Secretary of the Treasury or his delegate to issue before Feb. 1,
1988, final regulations to carry out amendments made by section
1114 of Pub. L. 99-514, see section 1141 of Pub. L. 99-514, set out
as a note under section 401 of this title.
PAYMENTS BY CHARITABLE ORGANIZATIONS TREATED AS EXEMPT PAYMENTS
Pub. L. 107-134, title I, Sec. 104, Jan. 23, 2002, 115 Stat.
2431, provided that:
"(a) In General. - For purposes of the Internal Revenue Code of
1986 -
"(1) payments made by an organization described in section
501(c)(3) of such Code by reason of the death, injury, wounding,
or illness of an individual incurred as the result of the
terrorist attacks against the United States on September 11,
2001, or an attack involving anthrax occurring on or after
September 11, 2001, and before January 1, 2002, shall be treated
as related to the purpose or function constituting the basis for
such organization's exemption under section 501 of such Code if
such payments are made in good faith using a reasonable and
objective formula which is consistently applied; and
"(2) in the case of a private foundation (as defined in section
509 of such Code), any payment described in paragraph (1) shall
not be treated as made to a disqualified person for purposes of
section 4941 of such Code.
"(b) Effective Date. - This section shall apply to payments made
on or after September 11, 2001."
SPECIAL RULE FOR CERTAIN COOPERATIVES
Section 1311(b)(2) of Pub. L. 104-168 provided that: "In the case
of an organization operating on a cooperative basis which, before
the date of the enactment of this Act [July 30, 1996], was
determined by the Secretary of the Treasury or his delegate, to be
described in section 501(c)(4) of the Internal Revenue Code of 1986
and exempt from tax under section 501(a) of such Code, the
allocation or return of net margins or capital to the members of
such organization in accordance with its incorporating statute and
bylaws shall not be treated for purposes of such Code as the
inurement of the net earnings of such organization to the benefit
of any private shareholder or individual. The preceding sentence
shall apply only if such statute and bylaws are substantially as
such statute and bylaws were in existence on the date of the
enactment of this Act."
APPLICATION OF PUB. L. 100-647 TO SECTION 501(C)(3) BONDS
Section 1013(i) of Pub. L. 100-647 provided that: "In accordance
with section 1302 of the Reform Act [Pub. L. 99-514, set out as a
note below], each amendment and other provision of this Act [see
Tables for classification] which applies to private activity bonds
shall, unless otherwise expressly provided, apply to qualified
501(c)(3) bonds."
CANCELLATION OF CERTAIN DEBTS ORIGINATED BY OR GUARANTEED BY UNITED
STATES NOT TAKEN INTO ACCOUNT IN DETERMINING TAX EXEMPT STATUS OF
CERTAIN ORGANIZATIONS
Section 6203 of Pub. L. 100-647 provided that: "Subparagraph (A)
of section 501(c)(12) of the 1986 Code shall be applied without
taking into account any income attributable to the cancellation of
any loan originally made or guaranteed by the United States (or any
agency or instrumentality thereof) if such cancellation occurs
after 1986 and before 1990."
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989
For provisions directing that if any amendments made by subtitle
A or subtitle C of title XI [Secs. 1101-1147 and 1171-1177] or
title XVIII [Secs. 1800-1899A] of Pub. L. 99-514 require an
amendment to any plan, such plan amendment shall not be required to
be made before the first plan year beginning on or after Jan. 1,
1989, see section 1140 of Pub. L. 99-514, as amended, set out as a
note under section 401 of this title.
TREATMENT OF SECTION 501(C)(3) BONDS
Section 1302 of title XIII of Pub. L. 99-514 provided that:
"Nothing in the treatment of section 501(c)(3) bonds as private
activity bonds under the amendments made by this title [enacting
sections 141 to 150 and 7703 of this title, amending sections 2,
22, 25, 32, 86, 103, 105, 152, 153, 163, 172, 194, 269A, 414, 879,
1016, 1398, 3402, 4701, 4940, 4942, 4988, 6362, 6652, and 7871 of
this title, repealing sections 103A, 1391 to 1397, and 6039B of
this title, enacting provisions set out as notes under sections 141
and 148 of this title, and amending provisions set out as a note
under section 103A of this title] shall be construed as indicating
how section 501(c)(3) bonds will be treated in future legislation,
and any change in future legislation applicable to private activity
bonds shall apply to section 501(c)(3) bonds only if expressly
provided in such legislation."
TAX-EXEMPT STATUS FOR ORGANIZATION INTRODUCING INTO PUBLIC USE
TECHNOLOGY DEVELOPED BY QUALIFIED ORGANIZATIONS
Section 1605 of Pub. L. 99-514 provided that:
"(a) In General. - For purposes of the Internal Revenue Code of
1986, an organization shall be treated as an organization organized
and operated exclusively for charitable purposes if such
organization -
"(1) is organized and operated exclusively -
"(A) to provide for (directly or by arranging for and
supervising the performance by independent contractors) -
"(i) reviewing technology disclosures from qualified
organizations,
"(ii) obtaining protection for such technology through
patents, copyrights, or other means, and
"(iii) licensing, sale, or other exploitation of such
technology,
"(B) to distribute the income therefrom, to such qualified
organizations after paying expenses and other amounts as agreed
with the originating qualified organizations, and
"(C) to make research grants to such qualified organizations,
"(2) regularly provides the services and research grants
described in paragraph (1) exclusively to 1 or more qualified
organizations, except that research grants may be made to such
qualified organizations through an organization which is
controlled by 1 or more organizations each of which -
"(A) is an organization described in section 501(c)(3) of the
Internal Revenue Code of 1986 or the income of which is
excluded from taxation under section 115 of such Code, and
"(B) may be a recipient of the services or research grants
described in paragraph (1),
"(3) derives at least 80 percent of its gross revenues from
providing services to qualified organizations located in the same
State as the State in which such organization has its principal
office, and
"(4) was incorporated on July 20, 1981.
"(b) Qualified Organizations. - For purposes of this section, the
term 'qualified organization' has the same meaning given to such
term by subparagraphs (A) and (B) of section 41(e)(6) (as
redesignated by section 231(d)(2)) of the Internal Revenue Code of
1986.
"(c) Treatment of Investment in a Technology Transfer Service
Organization. -
"(1) In general. - A qualified investment made by a private
foundation in an organization described in subparagraph (C) shall
be treated as an investment described in section 4944(c) of the
Internal Revenue Code of 1986 and shall not result in imposition
of taxes under section 4941, 4943, 4944, 4945, or 507(c) of such
Code.
"(2) Definitions. - For purposes of this subsection -
"(A) Qualified investment. - The term 'qualified investment'
means a transfer by a private foundation of -
"(i) all of the patents, copyrights, know-how, and other
technology or rights thereto of the private foundation, and
"(ii) investment assets, net receivables, and cash not
exceeding $35,000,000,
to such organization in exchange for debt.
"(B) Private foundation. - The term 'private foundation'
means -
"(i) a nonprofit corporation which was incorporated before
1913 which is described in sections 501(c)(3) and 509(a) of
such Code, and which is exempt from taxation under section
501(a) of such Code, and
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