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Form of organization - IRS regulations
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Sunday, September 20, 2015 at 3:16 PM
On another thread I asked a question about obtaining a federal ID number. Since I want to get practical answers to my question, I didn't want to include this discussion in that thread. If you would rather discuss this offline, that's OK too.
Does anyone see it differently or are we really just talking about expedience and risk? Under that Code Section the organization files a Form 1024 - Application for Recognition of Exemption Under Section Section 501(a). While I understand why it might be a little involved to go through the process of setting up a 501(C)(7), it certainly is a lot less involved than setting up a 501(C)(3), which is used by organizations that can collect funds where the donor can get a tax deduction. I was just wondering if anyone else has felt a little bit squeamish acting as a fiduciary and using a personal ID number for credit card collections and for their bank account? If I am missing something, please let me know.
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![]() I ran funds for our reunion 5 years ago through my personal premier PayPal account to be able to accept online payments. This year, I opened an account with an EIN number. Go HERE Monday to get one. It does not take long and you'll be good to go. (The site is not open to applications on the weekend.) Thanks for the info on the 501(c)7. Will be looking into that. We did not know about it and received the EIN without a problem.
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Sunday, September 20, 2015 at 4:49 PM - Response #2
Art- I understand your concern but perhaps you're looking at this with undo caution. I really don't think the IRS wants to put us in the federal penitentiary. I think they'd rather issue a hefty fine to help bail the country out of the trillions of $$ in debt we have.
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![]() Personally, I will not recommend my class go for 501(C)(7) status. We would not gain significant enough benefit to justify the amount of record keeping and due diligence the status would require. We are simply not a large enough group and this does not begin to touch on the cost of the application for the status.
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Wednesday, September 23, 2015 at 7:24 PM - Response #4
I agree with Gwen...pain in the butt. You have to have your books audited every 3 yrs..follow IRS guideline..plus you have to incorporate as a social club. We have a lawyer pro bono (a fellow classmate) who does all our legal stuff..none has come up since we started in 2009-2013. We had a CPA on board too.thru our treasurer who resigned when they formed a corp. I can still use it..but I am forming a new committee since the corp one is disbanding..I know confusing You can get a bank account for community organizations ie: social clubs, boy/girl scout troupes, etc etc at most banks. TCF Bank is where we are thinking about opening up an account. The PaPpal account is actually better because it is accepted anywhere...the downsize is you have to pay a transaction fee. I hope this helps Gwen Corey wrote: Personally, I will not recommend my class go for 501(C)(7) status. We would not gain significant enough benefit to justify the amount of record keeping and due diligence the status would require. We are simply not a large enough group and this does not begin to touch on the cost of the application for the status.
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