Page 377

TITLE 26-INTERNAL REVENUE CODE such exemption as an association described in paragraph (9) of this subsection merely be- cause such organization provides for the pay- ment of supplemental unemployment bene- fits (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 liabil- ities with respect to employees under the plan, for any part of the corpus or income to be (within the taxable year or there- after) used for, or diverted to, any purpose other than the providing of benefits under the plan, (B) such benefits are payable to employ- ees under a classification which is set forth in the plan and which is found by the Sec- retary not to be discriminatory in favor of employees who are officers, shareholders, persons whose principal duties consist of su- pervising the work of other employees, or highly compensated employees, and (C) such benefits do not discriminate in favor of employees who are officers, share- holders, persons whose principal duties con- sist of supervising the work of other em- ployees, or highly compensated employees. A plan shall not be considered discrimina- tory within the meaning of this subpara- graph 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 em- ployees covered by the plan. (19) A post or organizAtion of war veterans, or an auxiliary unit or society of, or a trust or foundation for, any such post or organiza- tion- (A) organized in the United States or any of its possessions, (B) at least 75 percent of the members of which are war veterans and substantially all of the other members of which are individ- uals who are veterans (but not war veter- ans), or are cadets, or are spouses, widows, or widowers of war veterans or such individ- uals, and (C) no part of the net earnings of which inures to the benefit of any private share- holder or individual. (20) an organization or trust created or or- ganized in the United States, the exclusive function of which is to form part of a quali- fied 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 section 501(c)(20) merely because it pro- vides legal services or indemnification against the cost of legal services unassociated with a qualified group legal services plan. (d) Religious and apostolic organizations The following organizations are referred to in subsection (a): Religious or apostolic associ- ations or corporations, if such associations or corporations have a common treasury or com- munity 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 in- cluded 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 pur- poses, if- (1) such organization is organized and oper- ated 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 sub- section (c)(3) and exempt from taxation under subsection (a), would constitute ac- tivities in exercising or performing the pur- pose or function constituting the basis for its exemption: data processing, purchasing, warehousing, billing and collection, food, clinical, industrial engineering, laboratory, printing, communications, record center, and personnel (including selection, testing, training, and education of personnel) ser- vices; and (B) to perform such services solely for two or more hospitals each of which is- (i) an organization described in subsec- tion (c)(3) which is exempt from taxation under subsection (a), (it) 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 in- strumentality of any of the foregoing; (2) such organization is organized and oper- ated on a cooperative basis and allocates or pays, within 8 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 pa- trons. 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 organi- zation 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 rein- vest (including arranging for and supervising the performance by independent contractors Page 377 § 501