AboutHarvey Mechanic Expertise Federal tax issues of nonprofit 501(c)(3) public charities only. Establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer question about Nonprofit's Unrelated Business or how to fill out forms. This forum is only for legal questions about a specific nonprofit asked by members or those otherwise directly effected by the specific nonprofit organization.
Experience I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar.
I'm a music director at a High School in California. I have a booster's club. We would like to open an account and put fundraising moneies into it and have a board to determine expenditures.
Do we need to become a non-profit organization to open an account?
Can we use the school's tax ID?
Do we have to be INC?
Answer I am assuming that the school already received a determination letter from the Internal Revenue Service it is exempt under section 501(c)(3), not as a private foundation. The easiest then would be if you requested, in writing, permission from the school board and received permission from them to use their EIN. Otherwise, to have limited liability for the Directors and officers, you would set up a nonprofit public benefit corporation, In order to have donations deductible by the donors
according to Internal Revenue (IRS) Service regulations
and not to be treated by the IRS as a normal, for-profit
business, you would want to first incorporate or set up
an unincorporated association by Articles of Association
stating that you are organizing under Internal Revenue
Code Section 501(c)(3). The filing fees with the State are less than $60. I recommend incorporating as,
generally, that provides more liability protection to the
members.
After the initial set up, you would need to apply for a
EIN (tax id number) and it becomes a tax exempt number
after the IRS determination that your organization is
exempt. That determination letter could be effective
retroactively to the date of establishment of the
organization. The IRS minimum filing fee for such a
determination letter is $300 and goes up to $750.
See instructions to Application for Exemption
www.irs.gov/pub/irs-pdf/i1023.pdf
in the right column on the first page under "From 1023
not necessary" discusses who does not need to file and
among those is "Any organization that has gross receipts
in each taxable year of normally not more than $5,000."
You can review the IRS Publication 557 "Tax Exempt Status
for Your Organization" at:
