Homeschool leader stepping down: Who to notify?

Hi Carol,

I am stepping down from the leadership of my homeschool group and wonder what I need to do. What forms to file, contacts to make, etc. Can you direct me, please? We are a 501c3 in Pennsylvania.

Thanks in advance!

Jill

 

Jill,

Congratulations on your “retirement”! Well done, good and faithful servant. 🙂

There might be quite a few things to do to remove your name from state and IRS documents.

In my ebook Homeschool Organization Board Manual I explain what to do when a board members leaves or the board changes.

This Board Manual might be helpful to your remaining board members since it is a combination of a template for your board to create binders to keep important documents and a board training manual to explain the board’s duties and responsibilities.

 

 

 

It is common for nonprofits to change leaders and signers on the checking account quite frequently, maybe annually! Here’s what you need to do if your board members change.

Notify the Internal Revenue Service (IRS) when you file your annual information return, Form 990-N, 990-EZ or 990 that the board members have changed. You do not have to notify the IRS mid-year; only notify them when you file the 990.  The 990-N electronic postcard only asks for one officer’s name. The Forms 990-EZ and 990 have you list all board members.

Notify your State: Your state may require an annual report to the Secretary of State Office and/or the Attorney General. Often the states require an annual update and on that report you list the current board members. Each state is different, so you’ll have to research the details for your state. Research using this helpful website: https://www.harborcompliance.com/information/nonprofit-compliance-guide

Change Your Mailing Address: You can change your address with the IRS by simply providing the new address on your annual information return, Form 990-N, 990-EZ or 990.

Changing your address with your state may involve several agencies including the Secretary of State and Attorney General. Each state is different, so you’ll have to research the details for your state. You can research using this website: https://www.harborcompliance.com/information/nonprofit-compliance-guide

Change the Responsible Party on your EIN: You can change the responsible person on your organization’s Employer Identification Number (EIN) by filing an IRS Form 8822-B https://www.irs.gov/pub/irs-pdf/f8822b.pdf.

Change your Registered Agent: If you are a nonprofit corporation in your state (meaning you filed official Articles of Incorporation with your state), you assigned a Registered Agent. This is a personal who is a resident of your state and should always know how to reach your organization. Many states list the current Registered Agent on their websites. Do a search on “YOUR STATE Corporate search” then follow links to your state governments’ list of corporations (both for-profit and nonprofit). The list of corporations is usually maintained by the Secretary of State’s Office.

To change the registered agent for your organization, go to your Secretary of State’s website and look for a document called Change of Registered Agent.

Notify the bank: You will probably have to visit your bank in person with the new checkbook signers. They will need identification (like a Drivers License). At that time they can change the mailing address on file.

Make sure you remind the new treasurer to change the password for online access to the checking account as well.

 

I hope that helps!

Carol Topp, CPA
HomeschoolCPA.com
Helping homeschool leaders

When Applying for an EIN, They Want my Social Security Number!

 

Homeschool leader, Paula, was applying for an EIN (Employer Identification Number) online, but the IRS website asked for her SSN (Social Security Number). She is reluctant to give it out. Should she be concerned?

Someone (the “responsible party”) must give their Social Security Number (SSN) so that the IRS can always trace leadership of a nonprofit (or a business) to a human being.

The IRS wants the name and Social Security Number of a specific individual it can contact if needed.

Requesting a name and SSN is also meant to prevent people from setting up dummy or scam organizations.

Listen to this episode (12 minutes) to find out more.

Featured Product:

Money Management in a Homeschool Organization

  • Does your homeschool group manage their money well?
  • Do you have a budget and know where the money is spent?
  • Do you know how to prevent fraud?

This 115 page book will help you to open a checking account, establish a budget, prevent mistakes and fraud, use software to keep the books, prepare a financial statement, and hire workers. Sample forms and examples of financial statements in clear English are provided.

Carol Topp, CPA

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Q&A: Adding another program under your homeschool group’s umbrella

Super Bowl LII is over. Did your team win? Perhaps your homeschool group is considering adding football team.

Tricia, a treasurer if a homeschool program in Texas asked questions here and here about adding a football program. The homeschool group has 501(c)(3) status with the IRS.

She had several questions about tax exempt status and financial oversight.

  1.  What steps with the IRS do we need to follow to bring them under our homeschool group’s tax exempt umbrella?
  2. What forms would we need to file?
  3. Would they share our tax ID number or would they need their own?  What are concerns should we consider in doing this?
  4. The benefits to our members are obvious, but we don’t want to overlook concerns if there are any.  They would handle their own bank account, but how much would we need to manage?

 

Tricia,

I read your 501(c)(3) tax exempt application given to the IRS and see that sports teams was part of your mission. That’s good, because you do not have to approach the IRS and ask for permission to add the football program; it was included in your original tax exempt application.

Here are my answers to your questions:

1. When you file your 990 or 990-EZ Annual Information Return with the IRS, you simply list the football program as one of your programs. If your gross revenues are under $50,000 per year, you’ll file the simple Form 990-N and no explanation is required.

2. There are no additional forms to file beyond the annual Form 990/990-EZ or 990-N. That’s because sports teams was part of your mission in your original tax exempt application.

3. Use your main group’s EIN (tax ID number). The football program is just another activity run by the main group, so you should expect the typical concerns such as: Are they following policies, being careful, keeping good financial records and practices, etc? My book Money Management in a Homeschool Organization can help in this area.

4. Your main organization should have oversight of the football program’s bank balances. This includes allowing you, as the main group’s treasurer, access to their bank account online and require they give you a monthly bank reconciliation report and monthly reports of the income and expenses.

This may be a lot of extra work for you as a volunteer treasurer, so you may need to hire a bookkeeper or recruit more help from volunteers.

Tricia asked her questions by email. I can do that  for your homeschool program, but it is very time consuming to read and reply to emails. I charge a reduced rate of $50/hour to read and reply to emails. Or perhaps a phone call would be better. Contact me to arrange a private phone consultation.

Carol Topp, CPA

 

Do we need a new EIN for our new nonprofit corporation?

Our homeschool group already has an EIN (Employer Identification Number), but we recently decided to work toward 501c3 status. We are now incorporated.
Do we need a new EIN or can we just change the name on the one we have?

-Kellie

The IRS, who issues EINs, makes it clear that you need a new EIN when you form a new nonprofit corporation.

You will be required to obtain a new EIN if any of the following statements are true.

  • A corporation receives a new charter from the secretary of state.

Source:

You can get a new EIN online, but it’s helpful to look over the Form SS-4 so you know what questions will be asked.

Carol Topp, CPA

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How can we change the contact name on our EIN?

 

When your homeschool group applied for an Employer Identification Number with the IRS, you had to give a responsible party’s name and their Social Security Number. Now that person is stepping down from your homeschool board.

How do you change the responsible party’s name on your EIN? Carol Topp, CPA explains how in this short podcast (9.5 minutes).


In the podcast, I mentioned Money Management in a Homeschool Organization. It’s a guide for homeschool treasurers that you may find helpful.

Carol Topp, CPA

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How Do I Get a Tax Exempt Number?

How does a nonprofit get tax exempt number from the IRS? They don’t!

In this short podcast Carol Topp CPA explains tax ID numbers and the various state agencies that may assign tax numbers.

Listen to the podcast (9 1/2 minutes)

FEATURED PRODUCT from HomeschoolCPA:

State Filings for Non-Profits

You’re not finished with paperwork when you receive tax exemption from the IRS. Your state may have several required forms for you to file as well. Carol Topp, CPA can help your homeschool nonprofit understand what forms to file with your state.

Click Here to request more information!

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How to close down an EIN for a tax exempt organization

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Closing an EIN for a tax exempt organization is described at the IRS website: https://www.irs.gov/businesses/small-businesses-self-employed/canceling-an-ein-closing-your-account 

Information for Exempt Organizations

If you applied for an EIN for an exempt organization that:

(1) never applied for formal exemption,

(2) is not covered in a group ruling, or

(3) never filed an information return (Form 990, 990-EZ or 990-N),

send a letter requesting the closing of your account to:

Internal Revenue Service
Attn: EO Entity
Mail Stop 6273
Ogden, UT 84201

or you may fax it to (855) 214-7520.

State the reason you wish to close your account. If you have a copy of the EIN Assignment Notice that was issued when your EIN was assigned, you should include that when you write. Otherwise, be sure to include the complete legal name of the entity, the EIN, and the mailing address.

 

Read the 3 criteria listed above carefully. If your organization fits all of the criteria, then write a letter to the IRS and give the reason you are closing your EIN. Usually it is because the organization dissolved or ceased its operations or activities.

If you fail one of the criteria, the IRS has different instructions. https://www.irs.gov/charities-non-profits/termination-of-an-exempt-organization.

You will have to file one more 990-N for the old organization and check “Yes” to the question “Has your organization terminated or gone out of business?” If you typically file the Form 990 or 990-EZ, than check the Terminated box in the header area on page 1.

Additionally, you will need to file a Schedule N, Liquidation, Termination, Dissolution, or Significant Disposition of Assets with your Form 990 or 990-EZ. If you file a 990-N, there is no Schedule N to file.

 

Carol Topp, CPA

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Can a homeschool group just get together without having to report to the IRS?

meeting

Can a homeschool group just get together without having to report to the IRS?

Dorothy

 

Dorothy,

Yes, a group of homeschool families can just gather together, but the group will be limited in their size and to dealing in cash only.

Very small homeschool groups are more like a play group or group of friends pooling their money to pay group expenses, like a field trip.

I compare it to a group of friends all going out to dinner. They each pitch in to pay the bill. These tiny groups do not file reports with the IRS. Very tiny homeschool groups can operate like this.

In this case, a group may not need an EIN or to open a checking account for the group, but they would be limited in size and limited to cash only. It’s usually when a group needs a checking account that they have dealings with the IRS, because they need an EIN to open a checking account.

I hope that helps,

Carol Topp, CPA

Best of: Checking accounts for homeschool organizations

checkbook07Here’s a collections of my best blog posts on checking accounts for homeschool organizations.

Start with this article about getting a identification number from the IRS before you open a checking account:

Getting an EIN from the IRS

Then read through these blog posts:

Checking accounts and EINs for homeschool groups
Will getting an EIN put us on the IRS radar?
EIN before or after incorporation?
Fraud in a homeschool group
Banker wants IRS letter to open a checking account

Cover Money Mgmt HS OrgYou’ll find more information on managing money in a homeschool organization in my book, Money Management in a Homeschool Organization: A Guide for Treasurers.

Carol Topp, CPA

A new nonprofit corporation. Do they need to reapply for 501c3 status?

homeschool nonprofit

Hi Carol,

I have been listening to your podcasts. Our group is already a 501c3 registered charity with the IRS. Unfortunately, we registered with our state as an unincorporated association. We would like the limited liability of a non-profit corporation and have the funds to apply, but after listening to your podcast I have a few questions:

1) Do we need to set up a new bank account? Or just change the set up on our current accounts? We have a Paypal linked, Amazon Smile account, Cash for Our Cause through our bank.

2) Will this affect anything with our IRS account? We won’t have to re-apply for 501c3 status will we?

Thanks for your help!
Misty in Texas

 

Misty,

I hope some of my podcasts were helpful! Thanks for listening.

Bad news: You need a new EIN and must reapply for tax exempt status

If your organization now wishes to become a nonprofit corporation (and I highly recommend it), you will have to get a new Employer Identification Number (EIN) and re-apply for 501(c)(3) tax exempt status in the name of your new corporation with its new EIN.

When you create a corporation, it is a new legal entity. So the IRS wants you to get a new EIN and makes you go through the 501(c)(3) application process again. Bummer.

Here’s a recent blog post on that issue: http://homeschoolcpa.com/incorporated-in-your-state-time-for-a-new-ein/

Good News: It’s easier to apply for 501(c)(3) status

Fortunately, the IRS does have a new short application for 501(c)(3) status, Form 1023-EZ. I have assisted about 25 nonprofit organizations get tax exempt status the new Form 1023-EZ. Some have received their tax exempt status in 10 days. That’s much faster than the 3 to 13 months in the past! Contact me if you’d like my help in applying (or reapplying) for tax exempt status.

The bank should make you open a new bank account with the new EIN. Paypal, Amazon Smile, etc. probably don’t care about your new corporate status, but you will need to re-connect them to your new bank account.

Carol Topp, CPA