Title 26 — Internal Revenue CodeRelease 119-73
§6044 Returns regarding payments of patronage dividends
Title 26 › Subtitle Subtitle F— - Procedure and Administration › Chapter CHAPTER 61— - INFORMATION AND RETURNS › Subchapter Subchapter A— - Returns and Records › Part PART III— - INFORMATION RETURNS › Subpart Subpart B— - Information Concerning Transactions With Other Persons › § 6044
Summary
Cooperatives that follow the special tax rules must tell the IRS about payments that add up to $10 or more to any person in a calendar year. They must use the IRS forms or rules and give the recipient’s name and address and the total amount paid. If payments are under $10, the co-op must report them only if the IRS asks. The rule covers money or property given as patronage dividends, certain nonpatronage distributions, redemptions of allocation or per‑unit certificates, and per‑unit retain allocations, but it excludes some “nonqualified” notices as the IRS defines. Payments by or to foreign corporations, nonresident aliens, or certain foreign partnerships may be treated differently under IRS rules. A co-op that mainly sells retail goods or services for personal use can apply to the IRS to be exempt from reporting. When property is reported, its value is the fair market value. Qualified written notices of allocation and qualified per‑unit retain certificates are counted at the dollar amount shown. Each co‑op that files a report must also give every person named on the report a written statement with the co‑op’s contact information and the total amount paid to that person.
Full Legal Text
Title 26, §6044
Internal Revenue Code — Source: USLM XML via OLRC
(a)(1)Except as otherwise provided in this section, every cooperative to which part I of subchapter T of chapter 1 applies, which makes payments of amounts described in subsection (b) aggregating $10 or more to any person during any calendar year, shall make a return according to the forms or regulations prescribed by the Secretary, setting forth the aggregate amount of such payments and the name and address of the person to whom paid.
(2)Every such cooperative which makes payments of amounts described in subsection (b) aggregating less than $10 to any person during any calendar year shall, when required by the Secretary, make a return setting forth the aggregate amount of such payments and the name and address of the person to whom paid.
(b)(1)Except as otherwise provided in this section, the amounts subject to reporting under subsection (a) are—
(A)the amount of any patronage dividend (as defined in section 1388(a)) which is paid in money, qualified written notices of allocation (as defined in section 1388(c)), or other property (except nonqualified written notices of allocation as defined in section 1388(d)),
(B)any amount described in section 1382(c)(2)(A) (relating to certain nonpatronage distributions) which is paid in money, qualified written notices of allocation, or other property (except nonqualified written notices of allocation) by an organization exempt from tax under section 521 (relating to exemption of farmers’ cooperatives from tax),
(C)any amount described in section 1382(b)(2) (relating to redemption of nonqualified written notices of allocation) and, in the case of an organization described in section 1381(a)(1), any amount described in section 1382(c)(2)(B) (relating to redemption of nonqualified written notices of allocation paid with respect to earnings derived from sources other than patronage), and
(D)the amount of any per-unit retain allocation (as defined in section 1388(f)) which is paid in qualified per-unit retain certificates (as defined in section 1388(h)), and
(E)any amount described in section 1382(b)(4) (relating to redemption of nonqualified per-unit retain certificates).
(2)The provisions of subsection (a) shall not apply, to the extent provided in regulations prescribed by the Secretary, to any payment—
(A)by a foreign corporation, or
(B)to a foreign corporation, a nonresident alien, or a partnership not engaged in trade or business in the United States and composed in whole or in part of nonresident aliens.
(c)A cooperative which the Secretary determines is primarily engaged in selling at retail goods or services of a type that are generally for personal, living, or family use shall, upon application to the Secretary, be granted exemption from the reporting requirements imposed by subsection (a). Application for exemption under this subsection shall be made in accordance with regulations prescribed by the Secretary.
(d)For purposes of this section, in determining the amount of any payment—
(1)property (other than a qualified written notice of allocation or a qualified per-unit retain certificate) shall be taken into account at its fair market value, and
(2)a qualified written notice of allocation or a qualified per-unit retain certificate shall be taken into account at its stated dollar amount.
(e)Every cooperative required to make a return under subsection (a) shall furnish to each person whose name is required to be set forth in such return a written statement showing—
(1)the name, address, and phone number of the information contact of the cooperative required to make such return, and
(2)the aggregate amount of payments to the person required to be shown on the return.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
Amendments
1996—Subsec. (e)(1). Pub. L. 104–168 substituted “name, address, and phone number of the information contact” for “name and address”. 1986—Subsec. (e). Pub. L. 99–514, in amending subsec. (e) generally, substituted “information is required” for “information is furnished” in heading and, in text, substituted references to persons required to make a return for former references to persons making a return and struck out provision directing that no statement was required if the aggregate amount of payments made to the person as shown on the return was less than $10. 1983—Pub. L. 98–67 substituted in subsec. (e) “The written statement required under the preceding sentence shall be furnished (either in person or in a separate mailing by first-class mail) to the person on or before January 31 of the year following the calendar year for which the return under subsection (a) was made, and shall be in such form as the Secretary may prescribe by
Regulations
” for “The written statement required under the preceding sentence shall be furnished to the person on or before January 31 of the year following the calendar year for which the return under subsection (a)(1) was made” and repealed
Amendments
made by Pub. L. 97–248. See 1982 Amendment note below. 1982—Subsecs. (a)(1), (b)(1), (e), (f). Pub. L. 97–248 provided that, applicable to payments of interest, dividends, and patronage dividends paid or credited after
June 30, 1983, subsecs. (a)(1), (b)(1), and (e) are amended and a new subsec. (f) is added. section 102(a), (b) of Pub. L. 98–67, title I, Aug. 5, 1983, 97 Stat. 369, repealed subtitle A (§§ 301–308) of Pub. L. 97–248 as of the close of
June 30, 1983, and provided that the Internal Revenue Code of 1954 [now 1986] [this title] shall be applied and administered (subject to certain exceptions) as if such subtitle A (and the
Amendments
made by such subtitle A) had not been enacted. 1976—Pub. L. 94–455 struck out “or his delegate” after “Secretary” wherever appearing. 1966—Subsec. (b)(1). Pub. L. 89–809, § 211(d)(1), added subpars. (D) and (E). Subsec. (d). Pub. L. 89–809, § 211(d)(2), inserted references to qualified per-unit retain certificates. 1962—Pub. L. 87–834 substituted “Returns regarding payments of patronage dividends” for “Returns regarding patronage dividends” in section catchline and amended text generally. Prior to amendment, text read as follows: “(a) Payments of $100 or More.—Any corporation allocating amounts as patronage dividends, rebates, or refunds (whether in cash, merchandise, capital stock, revolving fund certificates, retain certificates, certificates of indebtedness, letters of advice, or in some other manner that discloses to each patron the amount of such dividend, refund, or rebate) shall make a return showing— “(1) The name and address of each patron to whom it has made such allocations amounting to $100 or more during the calendar year; and “(2) The amount of such allocations to each patron. “(b) Payments Regardless of Amount.—If required by the Secretary or his delegate, any such corporation shall make a return of all patronage dividends, rebates, or refunds made during the calendar year to its patrons. “(c) Exceptions.—This section shall not apply in the case of any corporation (including any cooperative or nonprofit corporation engaged in rural electrification) described in section 501(c)(12) or (15) which is exempt from tax under section 501(a), or in the case of any corporation subject to a tax imposed by subchapter L of chapter 1.”
Statutory Notes and Related Subsidiaries
Effective Date
of 1996 AmendmentAmendment by Pub. L. 104–168 applicable to statements required to be furnished after Dec. 31, 1996 (determined without regard to any extension), see section 1201(b) of Pub. L. 104–168, set out as a note under section 6041 of this title.
Effective Date
of 1986 AmendmentAmendment by Pub. L. 99–514 applicable to returns the due date for which (determined without regard to extensions) is after Oct. 22, 1986, see section 1501(e) of Pub. L. 99–514, set out as an
Effective Date
note under section 6721 of this title.
Effective Date
of 1983 AmendmentAmendment by section 108(c) of Pub. L. 98–67 applicable with respect to payments made after Dec. 31, 1983, see section 110(a) of Pub. L. 98–67, set out as a note under section 31 of this title.
Effective Date
of 1966 AmendmentAmendment by Pub. L. 89–809 applicable with respect to calendar years after 1966, see section 211(e)(2) of Pub. L. 89–809, set out as a note under section 1382 of this title.
Effective Date
of 1962 AmendmentAmendment by Pub. L. 87–834 applicable to payments of dividends and interest made on or after Jan. 1, 1963, and to payments of amounts described in subsection (b) of this section made on or after Jan. 1, 1963, with respect to patronage occurring on or after the first day of the first taxable year of the cooperative beginning on or after Jan. 1, 1963, see section 19(h) of Pub. L. 87–834, set out as a note under section 6042 of this title.
Reference
Citations & Metadata
Citation
26 U.S.C. § 6044
Title 26 — Internal Revenue Code
Last Updated
Apr 6, 2026
Release point: 119-73