26 U.S.C. § 1381

Organizations to which part applies

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(a) In generalThis part shall apply to—(1) any organization exempt from tax under section 521 (relating to exemption of farmers’ cooperatives from tax), and(2) any corporation operating on a cooperative basis other than an organization—(A) which is exempt from tax under this chapter,(B) which is subject to the provisions of—(i) part II of subchapter H (relating to mutual savings banks, etc.), or(ii) subchapter L (relating to insurance companies), or(C) which is engaged in furnishing electric energy, or providing telephone service, to persons in rural areas.(b) Tax on certain farmers’ cooperatives

An organization described in subsection (a)(1) shall be subject to the tax imposed by section 11.

For treatment of income from load loss transactions of organizations described in subsection (a)(2)(C), see section 501(c)(12)(H).

(Added Pub. L. 87–834, § 17(a), Oct. 16, 1962, 76 Stat. 1045; amended Pub. L. 108–357, title III, § 319(d), Oct. 22, 2004, 118 Stat. 1472; Pub. L. 115–97, title I, § 13001(b)(2)(O), Dec. 22, 2017, 131 Stat. 2097.)Editorial NotesAmendments

2017—Subsec. (b). Pub. L. 115–97 substituted “tax imposed by section 11” for “taxes imposed by section 11 or 1201”.

2004—Subsec. (c). Pub. L. 108–357 added subsec. (c).

Statutory Notes and Related SubsidiariesEffective Date of 2017 Amendment

Amendment by Pub. L. 115–97 applicable to taxable years beginning after Dec. 31, 2017, see section 13001(c)(1) of Pub. L. 115–97, set out as a note under section 11 of this title.

Effective Date of 2004 Amendment

Amendment by Pub. L. 108–357 applicable to taxable years beginning after Oct. 22, 2004, see section 319(e) of Pub. L. 108–357, set out as a note under section 501 of this title.

Effective Date

Pub. L. 87–834, § 17(c), Oct. 16, 1962, 76 Stat. 1051, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that:“(1)For the cooperatives.—Except as provided in paragraph (3), the amendments made by subsections (a) and (b) [enacting this subchapter, amending sections 521 and 6072 of this title, and repealing section 522 of this title] shall apply to taxable years of organizations described in section 1381(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a)) beginning after December 31, 1962.“(2)For the patrons.—Except as provided in paragraph (3), section 1385 of the Internal Revenue Code of 1986 (as added by subsection (a)) shall apply with respect to any amount received from any organization described in section 1381(a) of such Code, to the extent that such amount is paid by such organization in a taxable year of such organization beginning after December 31, 1962.“(3)Application of existing law.—In the case of any money, written notice of allocation, or other property paid by any organization described in section 1381(a)—“(A) before the first day of the first taxable year of such organization beginning after December 31, 1962, or“(B) on or after such first day with respect to patronage occurring before such first day,the tax treatment of such money, written notice of allocation, or other property (including the tax treatment of gain or loss on the redemption, sale, or other disposition of such written notice of allocation) by any person shall be made under the Internal Revenue Code of 1986 without regard to subchapter T of chapter 1 of such Code [this subchapter].”

Notes of Decisions

Cited in 14 cases, 1932–1993 · leading case: Farmers Grain Mktg. Terminal (AAL) v. United States, 434 F. Supp. 368 (N.D. Miss. 1977).

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Farmers Grain Mktg. Terminal (AAL) v. United States, 434 F. Supp. 368 (N.D. Miss. 1977). · cites it 5× “§ 521 , which provides exemption from taxation for farmers’ cooperative organizations except as otherwise provided in Part I of Subchapter T ( 26 U.S.C. § 1381 , et seq.). Four days later, the Internal Revenue Service (IRS) approved plaintiff’s exemption application, thus making…”

Conway Cnty. Farmers Ass'n v. United States, 588 F.2d 592 (8th Cir. 1978). “§ 1381(a)(2) ( 26 U.S.C. § 1381 (a)(2)). 5 Citing Revenue Ruling 72-602, 1972-2 Cum.”

IUE AFL-CIO Pension Fund v. Locke Mach. Co., 726 F. Supp. 561 (D.N.J. 1989). “26 U.S.C. § 1381 (a). 9 . Title IV was added to ERISA by the Multi-employer Pension Plan Amendments Act of 1980 ("MPPA”), Pub.”

A. Duda & Sons Coop. Ass'n v. United States, 504 F.2d 970 (5th Cir. 1974). “Thus, when the association filed the usual corporate income tax forms- for 1962 and subsequent years, it claimed deductions under Subchapter T of Chapter 1 of the Code, 26 U.S.C. § 1381 et seq., on the ground that it was operating on a cooperative basis, and continued to pay no…”

Linnton Plywood Ass'n v. United States, 410 F. Supp. 1100 (D. Or. 1976). “26 U.S.C. § 1381 (a)(2); Linnton Plywood Association v.”

Mississippi Valley Portland Cement Co. v. United States, 408 F.2d 827 (5th Cir. 1969). “( 26 U.S.C.A. § 1381 ) SEC. 1382. TAXABLE INCOME OF COOPERATIVES.”

Ocean Spray Cranberries, Inc. v. State Tax Comm'n, 246 N.E.2d 654 (Mass. 1969). “See also 26 U. S. C. §§ 1381 , 1382 (1964). The statutes are referred to above (fn.”

A. Duda & Sons Coop. Ass'n v. United States, 495 F.2d 193 (5th Cir. 1974). “Thus, when the Association filed the usual corporate income tax forms for 1962 and subsequent years, it claimed deductions under Sub-chapter T of Chapter 1 of the Code, 26 U.S.C. § 1381 et seq. on the ground that it was operating on a cooperative basis, and continued to pay no…”

Des Moines Cnty. Farm Serv. Co. v. United States, 448 F.2d 776 (8th Cir. 1971). “• This is a suit instituted by Des Moines County Farm Service Company, a non-exempt (under Subehapter T of the Internal Revenue Code of 1954, 26 U.S.C. § 1381 , et seq.) marketing and purchasing farmers cooperative organization seeking refunds on federal income taxes paid by it…”

CF Indus., Inc. v. Comm'r, 995 F.2d 101 (7th Cir. 1993). “ould be considered patronage-sourced *105 because, ultimately, the cooperative makes such sales only for the sake of its members? The danger of the slippery slope is aggravated by the fact that there appears to be no limitation, other than what state statutes may or may not…”

M. & M. Sec. Co. v. Harney, 59 F.2d 574 (8th Cir. 1932). “(26 USCA §§ 1381, 1182), is designed to protect the interests of innocent third parties and extends only to the interest of the person who is convicted of a violation of the statute, or those who, by reason of their knowledge of the illegal use of the vehicle, share, in a sense…”

Farm Bureau Servs., Inc. v. United States, 547 F. Supp. 1279 (W.D. Mich. 1982). “Taxpayer is a “cooperative” subject to Subchapter T of the Internal Revenue Code ( 26 U.S.C. § 1381 , et seq.). During the years in issue, taxpayer was an agricultural cooperative engaged in the business (for profit) of furnishing farm supplies to and buying farm supplies from…”

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