Banking

[trido]

So, we cant open an account at this time. We are far from ready in any way.

What we do have,
A UBI number from the state of Wa. stating that the state recognizes us as a non profit corporation.
A desire to open an account


What
BofA wants

Federal Tax Id number
A business license (since we are not federally reconized as non profit)
board meeting minutes (stating that the BOD wants to open an account and I am authorized to do so, it needs everyones signature)
a designated business address and phone number. I dont feel comfortable doing this since I'm already a sole proprietor, I dont want the feds looking at my house twice. To me, this would be a red flag. Ive never been audited and really dont want to invite it.


What BECU wants (the person didnt know much about this so Im sure they will also require more than listed)

A UBI #
An EIN number or tax ID number

In the mean time, I took the money to my brothers house and its locked up in his gun safe.
His safe is built into his house and rather new with digital entry codes, His house is protected by a monitored alarm system and he also has video surveilance system which he monitors regularly. You might say my brother is a little paranoid . I sure do, but when you regularly keep large sums of money around, you learn to protect it.

Now we need to decide what to do for the next year.
Become a business and get the money into an account or sit on it and keep things gliding along as they are.
I can't put he money into my account since I'm self employed. It would have to be recorded as income at the end of the year.

If we try to get a business license we will likely have to get insurance first. It would probably eat up all of our monies.
Any thoughts on our next step.

 

[trido]

Here is a link for an EIN number. It looks like an EIN number is easy enough to aquire. Since I already have one with the government, again, I'm leary of putting my name on it. I would warn, make sure you want to do this. YOU will be tied to the club until someone else is willing to take over the burden. The last time I had an employee the feds bothered me for two years afterward before I finally convinced them he didnt work for me anymore. Not that this example is applicable in this case. Also, Ive been living in Seattle for three years now. Two weeks ago, I finished up some business with the City of Oakland. Our federal government is real good at losing paperwork with important signatures and taking forever to finish things up. I dont want to get tied up with them anymore than I have to.

 

[krisfal]

I do not mind registering for the EIN. The registration is specific to social clubs so I am not to worried about them coming after me if I am no longer a member of the BOD. I am almost done with the online application so a yeah or neah in the next few minutes and I can push the done button, it says we will get an EIN right away.

We already have the minutes typed up so that is no problem we just all need to sign it.

 

[krisfal]

So I backed out of the application, but it was real quick anyway so no problem. I will do it once I get a consencus.

I have done more research. We are only recognized as non profit by the state (does not give us tax exemption, it is more equivilant to a business license) and that is only step one of this process. We now need to get an EIN and file for tax exempt status with the fed as a social club 501c7 (for now as it is easy, we can change to 501c3 later). It appears we need the charter for the tax exemption filing as it is our proof of the social club structure.

However if we get the EIN I think we can find a bank that will let us open an account.

As far as an address goes I am wondering about a PO BOX or something at a mail service place. I know my parents have an address they use and they just contact the service and mail is forwarded to wherever they are (they are fulltime RVers) This would make it easy to get mail to whichever BOD member needed to get it and when the BOD changes you just call and give them the new forwarding address.

 

[trido]

I'd say to do it if your willing. When I say "I" regarding this matter. I am speaking more for my wife than myself. I was 95% done and had to stop from doing it because I know, as supportive in my actions as she is, she wouldnt be happy. The IRS has been a PITA for us in the past as you may have guessed.

 

[krisfal]

I'd say to do it if your willing. When I say "I" regarding this matter. I am speaking more for my wife than myself. I was 95% done and had to stop from doing it because I know, as supportive in my actions as she is, she wouldnt be happy. The IRS has been a PITA for us in the past as you may have guessed.

I checked it out and there is a process if you are no longer an officer of the club to get out of being the responsible party so I will do that when I decide to leave the board, since I can do it on my end and not rely on the new BOD I feel ok with the process.

I know what you mean about the IRS being a PITA, been there done that!

EDIT: forgot to add what I came here to say in the first place. Mail forwarding is pretty spendy $10/mo plus a fee to forward the mail. One offered to scan for free up to 35 pages of mail, that way you get instant access, but price for more than 35/mo was $.50 per piece plus postage.

But in comparison a PO BOX is pretty expensive too, Ours is about $90 a year and it is in a small town (South Prairie), they are more expensive in bigger towns. And with a PO Box somebody has to go and pick up mail timely so we can get membership cards to people. So I am at a loss on what we want to do for an address. I will use mine for the FED paperwork (unless we decide on a POB or mail service) that way it will come to me and I can make sure whatever needs to occur gets done since my name will be tied to it.

 

[trido]

I have to ask.......Is your hubbie OK with this? :lol:

 

[krisfal]

I have to ask.......Is your hubbie OK with this? :lol:

The advantage of being the wife is you don't have to ask!

j/k he trusts my judgment, I handle all that kind of stuff for his company.

 

[trido]

The advantage of being the wife is you don't have to ask!

j/k he trusts my judgment, I handle all that kind of stuff for his company.

:lol: Ya, my wife handled all of the government stuff for my company. Thats why I was so quick to stop when I thought about how unhappy she would be if I put everything in my name.
Maybe Im just being paranoid, but with a 22yr old still at home going through a DUI, a five year old in kindergarten and a wife earning a masters degree. We dont need any more headaches than we already have. Boy life was easier when I just had smowmobiles and fish!!!
Just a mere eight years ago. What was I thinking?

 

[Ed Hahn]

I still think this is easier than you guys think. I will check with how local club here went to non profit org then their banking. I remember being on BOD here and just going to Bank to register for account. It was simple. I do beleive we bought a business license.

 

[trido]

I do beleive we bought a business license.

Through the city I'm sure, and then the renewal fee is likely based on a tax amount of income earned in that city for the year. Maybe Im wrong, the state UBI# might get us in at the city level free and clear.
IM afraid that if we jump to get a Federal ID number right now then we will be forced to do taxes as a profitable business. We will open a can of worms that may take a bit or worrk to back out of.

Legally, a business is supposed to get a business license for every city it works in. Then at the end of the year. You do City taxes, state taxes and then federal taxes. Its a PITA. If we go pull a city business license top open an account, have a state cert. saying we are non-profit, and then get a federal ID number, the state certification could cause problems in the future because it doesnt match the other two forms of legality. Typically the three levels of tax governments arent communicating but if there was ever an audit this discrepancy could cause problems resulting in a slap on the hand fine. IME shorting the feds $300 in taxes quickly resulted in a $500 fine on top of the already $300 owed. I doubt the club could handle a problem like that.
Im not saying lets not do this, but lets look at it from all angles and procede with caution. There are alot of grey areas in the government concerning taxes at the end of the year, but if interpreted wrong, the Feds like to throw fines at you very quickly.

 

[krisfal]

The non profit paper work for a social club is very easy. We just have to have the state non-profit (done), EIN (just takes a couple of minutes, this is equivilant to a SS#, just an ID#) and the charter. Other wise with just the state stuff we are really no different then where we were and the risk to us as board members is still there. At this point because we are not federally recognized as a non-profit, we individually could be liable for taxes on the money and donations made to the club. We have to continue down this path to make things legal.

Once we get the 501(c)7 as long as our gross receipts are less than $25k, we are exempt and file a simple online form each year (in liue of a tax return) to verify our continuing status of being eligible to remain non profit.

The 501(c)7 designation is set up just for clubs like this one so that they do not have to pay taxes. My feeling is we are more at risk not doing this.

 

[Skimmy]

jeez...what a pita!!

i dont see why we would need insurance, unless it's required for the business licence, and considering what we do, i dont think we need to worry about it.

if you guys want to put anything in my name, that's fine btw...
and also, what can i do to make this easier...anything?

 

[krisfal]

Because of the worry Duanne has I have not yet filed for the EIN (this is the tax id#). Here is a link to more info and the online application link is at the bottom of the page, it is not available until 7pm on Sunday http://www.irs.gov/businesses/small/article/0,,id=102767,00.html

the link to the application for tax exempts status http://www.irs.gov/pub/irs-pdf/k1024.pdf

We need to be in agreement that this is what we want to do. I firmly believe we must do this.

 

[ghazni]

I agree with Kris. Let's get EIN # and 501 c (7) status and open the bank account.


Ghazni