Form 1021: How to Apply for Tax-Exempt Status
Understand the procedural requirements for establishing a tax-exempt Black Lung Benefit Trust through the IRS Form 1021 application process.
Form 1021 is the application a Black Lung Benefit Trust submits to the Internal Revenue Service (IRS) to request tax-exempt status under Internal Revenue Code Section 501(c)(21). The trust’s purpose is to satisfy a coal mine operator’s financial liabilities for claims related to disability or death of miners from pneumoconiosis, or black lung disease. Obtaining this status ensures the trust’s income is not subject to federal income tax, preserving the funds for affected miners and their families.
Determining Filing Requirements
Federal law holds coal mine operators liable for benefits related to black lung disease. To manage this liability, an operator establishes and funds a trust to cover payments for disability, medical treatments, and death benefits for eligible miners.
Once the trust is legally formed, the trust itself, not the coal mine operator, must file Form 1021. IRS recognition is contingent on the trust’s purpose and activities being strictly limited to satisfying the operator’s liabilities under federal and state black lung benefit laws.
Information and Documents for Submission
The trust must obtain its own Employer Identification Number (EIN), which is separate from the coal mine operator’s. An EIN is requested from the IRS by filing Form SS-4, Application for Employer Identification Number. The application also requires the trust’s full legal name, mailing address, and creation date. Additionally, the filer must provide the name and EIN of the coal mine operator and the names, titles, and addresses of all trustees.
A complete and conformed copy of the trust instrument must be submitted with Form 1021. This legal document outlines the trust’s purpose, the powers of the trustees, and its rules for administration. A conformed copy is one that matches the original and includes all signatures and any subsequent amendments.
The application package must include a $600 user fee. This payment is submitted with Form 8718, User Fee for Exempt Organization Determination Letter Request, and the check or money order should be made payable to the “United States Treasury.”
The Filing and Post-Filing Process
The complete application package must be mailed to the IRS at: Internal Revenue Service, P.O. Box 12192, Covington, KY 41012-0192. A different street address is required for private delivery services, which can be found on the IRS website.
After receiving the application, an IRS agent will examine the Form 1021 and trust instrument. The review verifies that the trust is organized and operated exclusively to pay black lung benefits and cover related administrative costs, in alignment with federal requirements.
The process concludes when the IRS issues a formal determination letter stating whether the trust is granted tax-exempt status. If approved, the trust is recognized as exempt from federal income tax from its date of creation, provided it has operated in accordance with the law.