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Tax Law (Questions About Taxes)/Federal Tax ID# and tax filing requirements

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Question
Hi!

Over the summer, a friend and I were trying to start a nonprofit partnership.  In order to register to accept donations in our state, we had to get a Federal Tax ID#.  We got the tax ID, but life got in the way and we never went any further with our enterprise.  We had no income at all from it and only a few minor expenses.  We did not register as a 501(c)(3).  

Since we have a Federal Tax ID#, do we have to file taxes this year? Will there be any penalties if we don't?  Can we keep the number in case we're in a better place next year to continue work on this project?  Thanks!

        Lynn

Answer
Lynn,

Thanks for your question.

Generally speaking, a partnership will not qualify to be a 501(c)(3) organization.  They are usually corporations or associations. My advice would be to terminate the ID number you have, then get another one if you start back up - and form a corporation.

However, to answer your question.  Technically, when an organization is issued a tax ID number, it must file a return every year.  Therefore, you should file a zero return.

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA

Expertise

I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

Experience

I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

Organizations
FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

Publications
The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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