EIN vs. TIN... Fed tax requirements

[SilverGirl]

Not sure this is the correct place to make this post but I want to reach as wide an audience as I can. I am a board member of a local club MOA club and we are discovering that we may have banking and IRS problems. I am hoping there is someone here familiar with Fed/IRS rules regarding EINs, TINs, and reporting requirements.

We have a change in Treasurer which necessitates changing the club's bank account. We are finding that there is now a requirement to provide an EIN in order to open a new bank account. I don't think this was the case the last time the account had to be changed (several years ago). In doing an archeological dig thru club records it appears that an EIN was acquired way back in 1995. However, the EIN is assigned to "club name c/o club member." The club member who did this is no longer a member of the club and no longer lives in the region of the U.S. that the club is in. The questions I am coming up with:

1) Is the EIN for the club or the person? Or both?
2) Since the EIN was assigned back in 1995 is it still valid if it really is just for the club?
3) If we call the IRS to confirm the EIN will we be triggering investigation by the IRS? (more on that later)

The second situation we are potentially dealing with is that the current bank account MAY have been opened without an EIN and we may be in a position of needing to close the account in a huge hurry. The questions with this:

1) When did needing an EIN become a requirement for opening a bank account? (Maybe the Patriot Act is why there is now this requirement?)
2) If we should have had an EIN on the current account and it turns out we don't how quickly do we need to close that account?

The last issue we have is that there is no record at all of the club having taken out a TIN... ever (this is the 'more on that later'). We are registered in our state as a non-profit corporation and we have annual receipts of substantially less than $10,000. We have been diligent in maintaining the non-profit status with the state over the years. We have apparently not filed anything with the IRS to date. There is a Form 990, 990EZ, and 990N (e-postcard thing) one of which I believe we should have been filing since 2008 when annual Fed filings became a requirement. The questions on this issue:

1) From what I've read quickly on the IRS website it seems that EINs and TINs are one and the same but one of the other board members has said that an EIN is for profit organizations and that a TIN is for non-profit organizations. Is this info correct?
2) What are the repercussions of not having been filing the Form 990N e-postcard?
3) If we request a TIN will we be triggering an investigation and possible penalties given that we've been in existence well prior to the filing requirement put into effect in 2008?

I'm sure I haven't thought of everything in terms of questions to ask. Any help here or via PM will be greatly appreciated.

thanks in advance,

overwhelmed board member
(I choose to remain anonymous due to the IRS angle because I've seen the organization in action. I'm not trying to be coy or uncooperative.)

 

[Omega Man]

I don't know if I can clearly help.....it IRS regulations after all There needs to be tracking on the account- academic at this point as there is no interest being paid. The number you will get will have the starting point for the account and if we were back in the day where some interest was paid, this would allow the 1099e "to have a home".
I guess, if I were you, I see/ask an accountant to get you going- do you have one in the club? Once you get through this, it should fix it forever.
HTH
Gary

 

[36654]

Not sure this is the correct place to make this post but I want to reach as wide an audience as I can. I am a board member of a local club MOA club and we are discovering that we may have banking and IRS problems. I am hoping there is someone here familiar with Fed/IRS rules regarding EINs, TINs, and reporting requirements.

We have a change in Treasurer which necessitates changing the club's bank account. We are finding that there is now a requirement to provide an EIN in order to open a new bank account. I don't think this was the case the last time the account had to be changed (several years ago). In doing an archeological dig thru club records it appears that an EIN was acquired way back in 1995. However, the EIN is assigned to "club name c/o club member." The club member who did this is no longer a member of the club and no longer lives in the region of the U.S. that the club is in. The questions I am coming up with:

1) Is the EIN for the club or the person? Or both?
2) Since the EIN was assigned back in 1995 is it still valid if it really is just for the club?
3) If we call the IRS to confirm the EIN will we be triggering investigation by the IRS? (more on that later)

The second situation we are potentially dealing with is that the current bank account MAY have been opened without an EIN and we may be in a position of needing to close the account in a huge hurry. The questions with this:

1) When did needing an EIN become a requirement for opening a bank account? (Maybe the Patriot Act is why there is now this requirement?)
2) If we should have had an EIN on the current account and it turns out we don't how quickly do we need to close that account?

The last issue we have is that there is no record at all of the club having taken out a TIN... ever (this is the 'more on that later'). We are registered in our state as a non-profit corporation and we have annual receipts of substantially less than $10,000. We have been diligent in maintaining the non-profit status with the state over the years. We have apparently not filed anything with the IRS to date. There is a Form 990, 990EZ, and 990N (e-postcard thing) one of which I believe we should have been filing since 2008 when annual Fed filings became a requirement. The questions on this issue:

1) From what I've read quickly on the IRS website it seems that EINs and TINs are one and the same but one of the other board members has said that an EIN is for profit organizations and that a TIN is for non-profit organizations. Is this info correct?
2) What are the repercussions of not having been filing the Form 990N e-postcard?
3) If we request a TIN will we be triggering an investigation and possible penalties given that we've been in existence well prior to the filing requirement put into effect in 2008?

I'm sure I haven't thought of everything in terms of questions to ask. Any help here or via PM will be greatly appreciated.

thanks in advance,

overwhelmed board member
(I choose to remain anonymous due to the IRS angle because I've seen the organization in action. I'm not trying to be coy or uncooperative.)

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Do-You-Need-an-EIN

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Lost-or-Misplaced-Your-EIN

Is it possible that the account was opened with the former treasurers Social Security No.? (Their TIN)

 

[osbornk]

I was the treasurer of a Kiwanis Club for 11 years and was on the board during that time and have been since then. I was responsible taking care of all of the IRS requirements.

You said you were registered by the state as a non-profit corporation. Are you a non-profit organization with the IRS? You should probably be 501 C4 with the IRS. If you are not, you should probably apply for one (this is where the IRS has been accused of targeting certain groups, not approving applications promptly and asking many questions). Your club should have been required to have a EIN to open a checking account (it works like a SS number for corporations and businesses). The bank should have the records to show what was used. The changing of officers doesn't require a new checking account. When you change officers, you change who has the authority to write checks by signing new signature cards.

Until a few years ago, a 501 C4 corporation was required to file a tax return. They changed the amounts required and you now do a 990 over the computer in about 10 minutes. Most have a filing deadline of February 15th. You have to use your EIN, name the officers of the club and certify that the income is less than $50,000 (I think). The IRS will remove your tax exempt status if you fail to do a 990 filing. I don't know the penalty.

We had to get an additional EIN and start another non-profit corporation to get a 501 C3 designation for our foundation (so contributions and sponsorships could be deducted by contributors). The application was about 50 pages long and it was approved in only a few months.

 

[JamesInCA]

Former small-501(c)(3) board member here. Not an expert by any means (and you should consult someone who is), but we did face some similar issues after a period of noncompliance with filing requirements by our predecessors.

We have a change in Treasurer which necessitates changing the club's bank account.

As already noted, a change in officers doesn't require changing your bank accounts, just notifying your bank of the new signatories. The money belongs to the corporation, not the people who set up the account. Now, if the account was set up improperly, you do need to close it and open a new one, correctly.

In doing an archeological dig thru club records it appears that an EIN was acquired way back in 1995. However, the EIN is assigned to "club name c/o club member."

Down below you appear to say something different. More later.

1) Is the EIN for the club or the person? Or both?

The EIN is for the club. It is a distinct entity from any of the people who established it. Remember: "Corporations are people, my friend."

2) Since the EIN was assigned back in 1995 is it still valid if it really is just for the club?

Is your Social Security Number still valid? Yes, your EIN is still valid, assuming it was validly issued in the first place.

3) If we call the IRS to confirm the EIN will we be triggering investigation by the IRS? (more on that later)

Who knows? More later.

The second situation we are potentially dealing with is that the current bank account MAY have been opened without an EIN and we may be in a position of needing to close the account in a huge hurry. The questions with this:

Why the "huge hurry"? Yes, if you've discovered infringement, you need to act in good faith to rectify it. It doesn't sound like you have a hair-on-fire situation here. Get the facts, and move forward accordingly.

1) When did needing an EIN become a requirement for opening a bank account? (Maybe the Patriot Act is why there is now this requirement?)

This is sort of moot, though we did find in our excavations that banks were, indeed, very loosey-goosey about small non-profits in years past. So your account may or may not have been opened with all the Ts dotted and Is crossed.

2) If we should have had an EIN on the current account and it turns out we don't how quickly do we need to close that account?

Again, I'd say, hair not on fire, but why would you wait? You can take care of all this in a one-hour meeting with your banker. If that.

The last issue we have is that there is no record at all of the club having taken out a TIN... ever (this is the 'more on that later').

And this is the part where you "appear to say something different," in that you discuss the EIN at length above.

We are registered in our state as a non-profit corporation and we have annual receipts of substantially less than $10,000. We have been diligent in maintaining the non-profit status with the state over the years. We have apparently not filed anything with the IRS to date. There is a Form 990, 990EZ, and 990N (e-postcard thing) one of which I believe we should have been filing since 2008 when annual Fed filings became a requirement. The questions on this issue:

Good! Your diligence in maintaining your state status, which is where your corporation exists as a legal entity, demonstrates your good faith. As your small non-profit owes no federal taxes (assuming you're not doing funny things with your money), you haven't been holding funds back from the IRS, even if you didn't comply with filing requirements.

1) From what I've read quickly on the IRS website it seems that EINs and TINs are one and the same but one of the other board members has said that an EIN is for profit organizations and that a TIN is for non-profit organizations. Is this info correct?

"Taxpayer Identification Number" is the general class of numbers. A Social Security Number is the TIN for an individual. An EIN is the TIN for a corporation. You should view future assertions of fact from this board member with skepticism proportional to their professed certainty about EINs.

2) What are the repercussions of not having been filing the Form 990N e-postcard?

I don't know. This is the "ask a real expert, not an Internet motorcycling forum" part.

3) If we request a TIN will we be triggering an investigation and possible penalties given that we've been in existence well prior to the filing requirement put into effect in 2008?

Ditto. However: You are triggering potential penalties, and personal liability, if you have discovered infringement and don't act to fix it.

My opinion: The IRS is not out to get small local clubs that are trying to come into compliance. Call the IRS with your EIN, assuming you have it, and find out to whom it was issued, to verify that it really is issued to your corporation. Call your bank and verify that the account is or isn't validly identified with your valid EIN. If it isn't, close it and get a new account.

As to the unfiled past returns, call the IRS or a CPA with non-profit experience for advice on what to do. Perhaps the MOA's CPA could answer your questions at a minimal cost.

Edit: As to whether a call or two to inquire about the history of your EIN will "trigger" anything ... I think you're attributing far more sophistication to the IRS than you probably should. The person who answers the phone is paid to answer your questions; they aren't an agent of the KGB.

 

[Texpaul]

First off I'd like to thank JamesInCA for that response. It is very concise and, though I am not an expert either, seems like very sound advice.

I was once contacted by another club in a similar situation. Initially the IRS sent them a bill for unpaid taxes but once they were able to provide the necessary records that was dropped. It costs them some money for professional/legal help but they avoided the tax bill. One of the things that helped them was good record keeping regarding expenses and income.

The big take away for any other club reading this, keep good records and devise a succession plan so incoming officers understand the clubs obligations and the process for dealing with them.