This may be a good question for any of the legal experts among the group. It
may be time to consider whether we want to remain an informal group or
organize as a nonprofit corporation.
Organizing as a nonprofit allows us to obtain a tax identification number
and open a bank account. This would involve having "real" officers and a set
of bylaws. The group would have to file an annual registration report with
the state. However, SLAGA would not have to pay federal taxes or file a tax
return unless it averages $25,000 in gross receipts per year for three
years. I am confident we are far below that revenue level.
I am neither an accountant nor a lawyer, but I do handle the finances for
two other nonprofit organizations, and base my opinion on experience working
with these two groups.
Pam E. (Tribble157)
From: Paul Konopacki <konopapw@xxxxxxxxxxxxxx> Reply-To: geocaching@xxxxxxxxxxxxx To: SLAGA Newsgroup <geocaching@xxxxxxxxxxxxx> Subject: [GeoStL] SLAGA bank account Date: Thu, 03 Oct 2002 22:49:36 -0500
Who can give advice on opening a bank account to handle our donations and purchases? I'm sure there are people out there who are dealing with this right now.
Here is something to start the discussion/debate:
GUIDELINES FOR OPERATING A NON-PROFIT BANK ACCOUNT "To open a non-profit bank account, you need to have a tax identification number (TIN) for your organization (form SS-4, Application for Tax Identification Number)"
Bank Account "When dealing with banks, the sticky part comes -- if you are an informal group -- with interest-bearing accounts (checking or savings). Technically, the federal government requires that someone be responsible for paying taxes on the earned interest. This means the bank may ask for a social security number and the person with that number must treat the interest from the account as part of her personal income. Obviously, some people may be reluctant to do this. With a checking account, you can get around this problem by opening an account that is non-interest bearing. With a savings account some banks will allow you to register the account as owned by a nonprofit group even thought technically you are not nonprofit. The banks are simply trying to stay on the good side of the federal auditors and such an arrangement will usually appease them as long as there is not a huge sum involved."
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