§ 501. — Exemption from tax on corporations, certain trusts, etc.
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From the U.S. Code Online via GPO Access
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[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 26USC501]
TITLE 26--INTERNAL REVENUE CODE
Subtitle A--Income Taxes
CHAPTER 1--NORMAL TAXES AND SURTAXES
Subchapter F--Exempt Organizations
PART I--GENERAL RULE
Sec. 501. Exemption from tax on corporations, certain trusts,
etc.
(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).
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\1\ See References in Text note below.
(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\
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\2\ So in original. Probably should be followed by a period.
(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, or widowers 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 \3\ 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.
---------------------------------------------------------------------------
\3\ So in original. Probably should be capitalized.
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(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) 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)).
(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.)
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.
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.
Section 11(b) of the Internal Security Act of 1950 (64 Stat. 997; 50
U.S.C. 790(b)), referred to in subsec. (p), was repealed by Pub. L. 103-
199, title VIII, Sec. 803(1), Dec. 17, 1993, 107 Stat. 2329.
Amendments
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 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
``(ii) the principal purposes of which are to support
research by and to provide technology transfer services to
organizations described in section 170(b)(1)(A) of such
Code--
``(I) which are exempt from taxation under section 501(a) of
such Code, or
``(II) the income of which is excluded from taxation under
section 115 of such Code.
``(C) Technology transfer organization.--The term
`technology transfer organization' means a corporation
established after the date of the enactment of this Act [Oct.
22, 1986]--
``(i) which is organized and operated to advance the
public welfare through the provision of technology transfer
services to research organizations,
``(ii) no part of the net earnings of which inures to
the benefit of, or is distributable to, any private
shareholder, individual, or entity, other than a private
foundation or research organization,
``(iii) which does not participate in, or intervene in
(including the publishing or distributing of statements) any
political campaign on behalf of any candidate for public
office,
``(iv) no substantial part of the activities of which is
carrying on propaganda, or otherwise attempting, to
influence legislation, and
``(v) upon liquidation or dissolution of which all of
its net assets can be distributed only to research
organizations.
``(d) Effective Date.--This section shall take effect on the date of
the enactment of this Act [Oct. 22, 1986].''
Applicability of 1976 Amendment to Certain Organizations
Section 1313(c) of Pub. L. 94-455, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ``An organization
which (without regard to the amendments made by this section [amending
this section and sections 170, 2055, and 2522 of this title]) is an
organization described in section 170(c)(2)(B), 501(c)(3), 2055(a)(2),
or 2522(a)(2) of the Internal Revenue Code of 1986 [formerly I.R.C.
1954] shall not be treated as an organization not so described as a
result of the amendments made by this section.''
Tax Exemption for Certain Puerto Rican Pension, etc., Plans
Section 1022(i) of Pub. L. 93-406, title II, Sept. 2, 1974, 88 Stat.
942, as amended by Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat.
2095, provided that:
``(1) General rule.--Effective for taxable years beginning after
December 31, 1973, for purposes of section 501(a) of the Internal
Revenue Code of 1986 [formerly I.R.C. 1954] (relating to exemption from
tax), any trust forming part of a pension, profit-sharing, or stock
bonus plan all of the participants of which are residents of the
Commonwealth of Puerto Rico shall be treated as an organization
described in section 401(a) of such Code if such trust--
``(A) forms part of a pension, profit-sharing, or stock bonus
plan, and
``(B) is exempt from income tax under the laws of the
Commonwealth of Puerto Rico.
``(2) Election to have provisions of, and amendments made by, title
ii of this act apply.--
``(A) If the administrator of a pension, profit-sharing, or
stock bonus plan which is created or organized in Puerto Rico
elects, at such time and in such manner as the Secretary of the
Treasury may require, to have the provisions of this paragraph
apply, for plan years beginning after the date of election any trust
forming a part of such plan shall be treated as a trust created or
organized in the United States for purposes of section 401(a) of the
Internal Revenue Code of 1986.
``(B) An election under subparagraph (A), once made, is
irrevocable.
``(C) This paragraph applies to plan years beginning after the
date of enactment of this Act [Sept. 2, 1974]
``(D) The source of any distributions made under a plan which
makes an election under this paragraph to participants and
beneficiaries residing outside of the United States shall be
determined, for purposes of subchapter N of chapter 1 of the
Internal Revenue Code of 1986 by the Secretary of the Treasury in
accordance with regulations prescribed by him. For purposes of this
subparagraph the United States means the United States as defined in
section 7701(a)(9) of the Internal Revenue Code of 1986.''
Exchanges for Sale of Poultry
Pub. L. 89-44, title VIII, Sec. 811, June 21, 1965, 79 Stat. 169,
provided that certain corporations, associations, or organizations
organized and operated exclusively for the purpose of providing an
exchange for the sale of poultry growers of a particular locality shall
be treated for purposes of this title as an exempt organization and that
such exemption shall apply to taxable years beginning after Dec. 31,
1953, and ending after Aug. 16, 1954, which begin before Jan. 1, 1966.
Section Referred to in Other Sections
This section is referred to in sections 21, 41, 42, 50, 57, 62, 72,
79, 101, 104, 108, 120, 129, 141, 144, 145, 146, 147, 148, 149, 150,
151, 168, 170, 192, 194A, 219, 246, 265, 267, 274, 280G, 318, 401, 402,
402A, 403, 404, 408, 410, 411, 412, 414, 415, 419, 419A, 447, 448, 457,
468A, 502, 503, 504, 505, 507, 508, 509, 511, 512, 513, 514, 527, 529,
542, 593, 642, 644, 681, 818, 831, 832, 854, 856, 871, 992, 1275, 1361,
1400L, 1441, 1504, 1563, 2055, 2503, 2522, 3121, 3303, 3306, 3309, 3401,
4041, 4221, 4251, 4253, 4294, 4421, 4911, 4912, 4940, 4941, 4942, 4945,
4947, 4948, 4951, 4952, 4953, 4955, 4958, 4962, 4972, 4974, 4975, 4979,
4980F, 4982, 5214, 6033, 6039F, 6043, 6047, 6048, 6049, 6072, 6104,
6110, 6113, 6420, 6421, 6427, 6501, 6711, 6852, 7409, 7428, 7454, 7526,
7603, 7611, 7701, 9012, 9501, 9702, 9712 of this title; title 2 sections
117e, 441b, 441i, 806, 1611, 1953; title 4 section 114; title 5 sections
504, 3102, 4111, 7342, 8440; title 7 sections 1726b, 1732, 2008o, 2279,
4809, 5801; title 8 section 1101; title 10 section 2580; title 12
sections 1441a-1, 1709, 1843, 3051, 4145, 4146; title 15 sections 37a,
77c, 80a-3, 80a-3a, 656, 1291, 1511d, 1679a, 6402; title 16 sections
18f-2, 284d, 539f, 583j-2, 742f, 1447a, 2105, 2708, 3451, 3838h, 3838q,
5406; title 17 section 114; title 18 sections 207, 209, 1307, 1511,
1955; title 19 section 3391; title 20 sections 80q-7, 1085, 1128a, 1135,
1681, 4357, 5502, 5509; title 21 sections 353, 1523; title 22 sections
262p-4c, 262p-4e; title 25 sections 3653, 3662, 3663; title 28 section
2412; title 29 sections 169, 623, 705, 1002, 1051, 1052, 1081, 1082,
1086, 1103, 1321, 1362, 1403, 2703; title 35 sections 201, 287; title 36
sections 40705, 40706, 80102, 80106, 152602; title 38 section 2051;
title 40 sections 525, 549, 550, 8902; title 42 sections 280e-11, 285l-
3, 290b, 300e-9, 409, 604, 1301, 1382a, 1382b, 1395w-28, 1395x, 1395eee,
1396b, 1396u-4, 1397a, 1485, 1760, 1784, 2000e, 2996b, 3056, 5177a,
5197h, 5603, 6322, 6371, 6372, 8013, 8143, 9607, 9660, 9907, 9926,
10702, 11371, 12111, 12584, 14505; title 43 section 390ss; title 45
section 1347; title 46 section 2101; title 47 sections 154, 396; title
49 section 13709.