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Nonprofit Law/Team Bank Accounts


From a documentation standpoint, what may be required from a 501c3 with regards to team bank accounts on a day to day basis, for a yearly tax return, and in the case of an IRS audit?

Also, once groups have the 501c3's EIN, they are able to use that EIN for fundraising without the organizations knowledge (unless there is scrupulous monitoring of these accounts by the club).  That in mind, how much risk does the 501c3 take on by allowing these accounts to exist coupled with the notion that they are managed by volunteer treasurers of various financial backgrounds?

As to recordkeeping, see pdf page 17-19 of the IRS Publication
4221-pc "Compliance Guide for 501(c)(3) Public Charities" which is
available at for on pdf
page 19 we see:
---Start of Excerpt --
Except in a few cases, the law does not require a special kind of
record. A public charity can choose any recordkeeping system,
suited to its activities, that clearly shows the organization's
income and expenses. The types of activities a public charity
conducts determines the type of records that should be kept for
federal tax purposes. A public charity should set up a
recordkeeping system using an accounting method that is appropriate
for proper monitoring and reporting of its financial activities for
the tax year.
--- End of Excerpt ---

As for the yearly "tax return" that would be the Form 990 series. Links to latest published Form 990 Series -- Forms, Schedules and Instructions are available at and there is the
explanation as to which 990 series return to file.  If there is a particular question that you are concerned about as to the reporting required on that form, give me the Part and line number.

A 501(c)(3) organization is responsible for anyone who, with authorization or knowledge of the organization uses the name or EIN of the organization. The 501(c)(3) organization needs to have a consolidated accounting system and is responsible for all bank accounts and funds going through those accounts.

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. For me to consider your individual situation and how the law applies, I would need to gather more information.

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Harvey Mechanic


DO NOT GIVE ME INFORMATION THAT YOU WANT KEPT CONFIDENTIAL. 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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