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Nonprofit Law/Middle school travel group


A few teachers from middle schools in our area organize an East Coast trip every spring break.  A tour company handles the trip costs.  In addition, a parent volunteer has handled collecting funds to buy sweatshirts etc. and the funds were run through one school's PTO in the past. The school administrators would like the trip to be more removed from school affiliation for several reasons so I plan to create an EIN for a social club and get a bank account using that tax ID number.  Does a group like this need organizing documents of any sort?

The answer is "no", but I thought you might like some more information. Some banks in California will not open an account for an incorporated association unless you obtain something more than an EIN (Employer Identification Number - or Taxpayer Id number) from the IRS, so you would want to check with the banks in your area. Let me know which bank is accommodating, if you find one, and then I could direct other readers to that particular bank.

You wrote that "a tour company handles the trip costs". Often people setting up unincorporated associations ask me about not having the liability protection that is generally offered by the corporate form (or the trust form). There is a provision in California Corp. Code 18605 that helps. (It is somewhat strange but Title 3 of the Corporation Code is entitled "Unincorporated Associations" and that 18605 is part of the that Title 3).   18605 provides:
---Start of Excerpt---
    A member, director, or agent of a nonprofit association is not liable for a debt, obligation, or liability of the association solely by reason of being a member, director, officer, or agent.
---End of Excerpt---

Instructions for Form SS-4 for the tax id number are available at:

The IRS explains in the right column of page 5 that, when applying
for the Employer Identification Number, the club may check a box
for `Banking purpose' "if you are requesting an EIN for banking
purposes only, and enter the banking purpose (for example, a
bowling league for depositing dues or an investment club for
dividend and interest reporting)."

check the line for "banking purposes only" and gives the examples,
"a bowling league for depositing dues or an investment club for
dividend and interest reporting)." on page 5 in the right
column under the heading "Banking purpose."

Donations will not be deductible, but the fund will not have
taxable income if its only income is donations or fees and no
profit goes to any insider and it conducts no sales activities to
the public.  It would not need to file annual federal tax returns
if it is an unincorporated association (while the c7 organizations
need to file annually Form 990).

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---

Other examples are given by the IRS for "Banking Purposes"...
"In order to open a bank account to deposit funds from a
fundraising event, memorial fund, bowling league, or other non-
business purpose, the bank may request an EIN be assigned for
identification purposes."

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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