Nonprofit Law/non profit


We are a not profit ski and social club. We have an employee ID number. Obviously this was applied for before my time as a member. Our budget is about $3K with about 14K in our bank account.  I also have paperwork that if the budget is under 50K annually no paperwork is needed.  We are not registered in our state.  Should we be taking steps to formalize and renew paperwork or should we continue to fly under the radar

Thank you

I am assuming that no one expects to receive any charitable deduction for payments to the club and that the club does not engage in any sales or service activities.  You would only be collecting funds from the members for the social events that they would be attending.  Then you can use the EIN for banking purposes only and would not be "conducting business" and would not need to file other papers with the IRS.

Narcotics Anonymous World Services advises affiliates who have
obtained an EIN (Employer Identification Number, also known as the
taxpayer identification number) for banking purposes only:
--- Start of Excerpt ---
Any NA group that acquires an EIN should consider that the IRS
could at some point in time contact them and request valid
financial activity information. This is one reason that NA groups
will want to maintain detailed records, including treasurer's
records, bank statements, receipts and any other documentation of
their financial activities. We suggest that NA groups maintain
accurate financial records by using the group record worksheets in
the Group Treasurer's Workbook. The worksheets and other above
mentioned records should be kept for at least five years. Care
should be taken when assigning responsibility for storage of the
records, so that they remain available to the group if needed.
---End of Excerpt---

States generally require businesses to register, but they do not require that for groups that just get together and pool their funds for social events, unless the group advertises to the public.  However, you should understand that, as an unincorporated association, each member is liable for the activities of the organization.  States have established that corporations do not make members, officers, or directors liable for the debts of the corporation (unless they were personally involved).

Harvey Mechanic
Attorney at Law

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


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 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 "" without the quotes and then add your search terms before hitting enter.


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.


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

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

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