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Merlo
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Category: Tax
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Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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I need to open a bank account for a small one time charity/donation

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I need to open a bank account for a small one time charity/donation event to help cover medical costs for someone who is without insurance and was just diagnosed with a brain tumor. I need to open the account with a separate Fed Tax ID number that is not my own SS#. The application for the Fed ID # XXXXX a despcription...Trust? LLC? Charity? these funds need to be accessible within 90 days and are gifts.

Please help!
Submitted: 5 years ago.
Category: Tax
Expert:  Merlo replied 5 years ago.
HelloCustomer

Donations that people would make to you to help with these medical expenses will not be viewed as income to you. The IRS views these as gifts and not as charitable contributions, so the donors will not be able to claim these donations as a deduction on their tax returns. Donations can only be deducted if they are given to a qualified charitable organization with 501(c) status. At the same time, gifts are never taxable to the recipient.

Because of this, you would not really be required to obtain a separate EIN for a bank account to hold these funds. You could simply deposit them in to a separate bank account using your name and social security number as the account owner.

However, if the checks will be made out to another name other than your name, (example "The Joseph Smith Medical Fund"), then you can apply for an EIN if you choose to do so.

In order to obtain the EIN, on line # XXXXX of the application you would enter your name. On line # XXXXX enter the trade name you will be using to have people make out the checks. On line 9a where it asks what type of entity you are, check the box for "other" and then list "fund raising account". On line # XXXXX where it asks the reason for applying, check the box that says "banking purposes" and then list the description as "fund raising account".

That is all you need to do to apply for a separate EIN for this account.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you mm and let me know if you have more questions.



Customer: replied 5 years ago.

The info looks great, accept the IRS EIN application on line is not laid out as you have it in your repsonse....it is still requiring me to check a box that is requiring me to describe the accout, i.e (bankruptcy, church, etc) I do not see an option for personal banking. Are you referring to a different form maybe?

Thanks!

Expert:  Merlo replied 5 years ago.
Hello again mm,

Yes, I am referring to the Form SS-4 which is what you would fill out if you are doing this by mail. Let me take a quick look at the on line application and see where it is different. I will get right back to you.

Customer: replied 5 years ago.
great, thank you, I'll be right here
Expert:  Merlo replied 5 years ago.
Hello again mm,

Okay, I just looked at the on line form, and it is a little different. So here is what you need to do.

On the first page it asks you what type of legal structure you are. At the bottom of that page there is a box you can check to "view additional types". Check that box and it will bring up a list of more types to choose from. On that next page choose the last option, which is "other non profit/tax exempt organization".

The next page will ask you to confirm your selection. Once you do that the next page that comes up allows you to select "banking purposes" as the reason you are applying.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you mm.

Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad
Merlo and 6 other Tax Specialists are ready to help you
Customer: replied 5 years ago.
Thank you so much!
Expert:  Merlo replied 5 years ago.
You are welcome. Hope everything works out for you.

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Merlo
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25+ years tax consulting. Specializing in returns for US citizens living abroad