Checking accounts and EINs for homeschool groups

We have always had a checking account under a parent’s name. We were adding a name to our account this year when the bank informed us we can no longer do this and we need to have our own Tax ID number. Will we need to file returns with the IRS if we get a tax ID number?

I strongly discourage using a parent’s name on an organization’s checking account. The organization should have a checking account in its own name and use an Employer Identification Number (EIN), not an individual’s social security number.

Getting an EIN does mean your organization will need to do some annual reporting to the IRS.

It didn’t used to be this way.

Homeschool groups used to be able to get an EIN, open a checking account, and never have to file any annual reports with the IRS. All that changed in 2006 when Congress passed a rule saying EVERY tax exempt organization had to file an annual information return with the IRS, Form 990, 990-EZ or 990-N with the IRS each year.

Read my 990-N FAQ page for details.

 

IRS and Your Homeschool Org coverMy book, The IRS and Your Homeschool Organization, explains the IRS required filings for your homeschool group.
Carol Topp, CPA

Comments

  1. Paula Wolfe says:

    Thanks fr your guidance. A blessing! Im a treasurer for a co-op that’s just starting out. We need to open a checking account. I’ve tried applying for the EIN online, but the IRS website is asking for a SSN or EIN of the responsible party. Do I need to give mine? Thanks in advance!

    Paula in Tx

  2. Carol Topp says:

    Yes, Paula, someone must give a SSN so that the IRS can always trace leadership of a nonprofit (or a business) to a human being.
    You can request the IRS remove your name from the EIN when you step down from being treasurer.
    When that time comes, file a IRS Form 8822-B (find it at IRS.gov) to chang ethe contact name associated with your EIN.

    Carol Topp, CPA

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