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Nonprofit Law/non profit bank deposits

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Question
Are there any standards for how soon after receiving income that the funds should be deposited in a bank account? If no rules, is there a general guideline for making deposits?

Answer
I have in my profile that this free forum is only for general questions relating to IRS federal exemption issues of 501(c)(3) organizations.  In fact, there is no IRS regulation that requires that funds have to be deposited into a bank account.

As for guidelines, which, of course, are not in my domain (the law), I suggest you check with accountants. I do agree with the accountancy firm that advised, "The amount of cash receipts a business receives each day will dictate how often a deposit is necessary. However, the length of time between bank deposits should not exceed one week."
http://pages.citebite.com/n1o3i5w4p5rxl

In any case, the law imposes the burden on the exempt organization to show the use of its funds. See, for example, Church of Gospel Ministry, Inc. v. United States
640 F. Supp. 96 - Dist. Court, Dist. of Columbia, 1986
http://goo.gl/e1oKB

There, the court wrote "CGM has failed to keep records adequate to determine the full nature of its operations and failed to show that its operations do not inure in part to the private benefit of its officers." http://goo.gl/WxCtV

Harvey Mechanic, Attorney at Law -
Harvey108@hotmail.com

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  

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Harvey Mechanic

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I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about 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 questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at Harvey108@hotmail.com I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "site:allexperts.com/q/nonprofit" without the quotes and then add your search terms before hitting enter.

Experience

I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.

Education/Credentials

B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.


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