1.501(c)(20)-1. Qualified group legal services
plan trust, EE-5-78, 4/29/80.
(a) Qualified group legal services plan. --For purposes of this
section, a "qualified group legal services plan" is
a plan that satisfies the requirements of section 120(b) and
§1.120-2.
(b) General requirements for exemption. --Under
section 501(c)(20), an organization or trust created or organized
in the United States is exempt as provided in section 501(a)
if the exclusive function of the organization or trust is to
form part of a qualified group legal services plan or plans.
(c) Exception for trust associated with section
501(c) organization. --As described in section 120(c)(5)(C),
employer contributions under a qualified group legal services
plan may be paid to an organization described in section 501(c)
if that organization is permitted by section 501(c) to receive
payments from an employer for support of a qualified group legal
services plan. However, that organization must, in turn, pay
or credit the contributions to an organization or trust described
in section 501(c)(20). In such a case, the organization or trust
to which the contributions are finally paid or credited is considered
to satisfy the requirement that the exclusive function of the
organization or trust be to form part of a qualified group legal
services plan or plans, notwithstanding that the organization
or trust provides legal services or indemnification against
the cost of legal services unassociated with such a qualified
plan. This exception applies, however, only if any such legal
service or indemnification is provided under a program established
and maintained by the organization described in section 501(c)
to which the employer contributions under a qualified group
legal services plan are first paid under section 120(c)(5)(C).
Whether providing legal services or indemnification against
the cost of legal services unassociated with a qualified group
legal services plan is a permissible activity of an organization
described in section 501(c) is determined under the rules under
that paragraph of section 501(c) in which the organization is
described. [Reg. §1.501(c)(20)-1.]
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