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My neighborhood watch group (NC) is trying to get a EIN number

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in order to open a...
My neighborhood watch group (NC) is trying to get a EIN number in order to open a bank account. We are currently trying to raise money to purchse a new neighborhood sign. Once we apply for the EIN and have our articles of assocation what do we need to do (if possible) to make it a non-profit tax exempt association? We are confused on what forms we must file. We are not going to be collecting dues from homeowners like a homeowners association would we just want to be able to accept small donations to cover small items through out the neighborhood. Example - tshirts for our watch members that patrol the streets and our new neighborhood sign.
Submitted: 9 years ago.Category: Tax
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11/2/2008
Tax Professional: Lev, Tax Advisor replied 9 years ago
Lev
Lev, Tax Advisor
Category: Tax
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On Sep 9, 2008, the IRS issued temporary Income Tax Regulations, which eliminate the advance ruling process for a section 501(c)(3) organization. Under the new regulations, a new 501(c)(3) organization will be classified as a publicly supported charity, and not a private foundation, if it can show that it reasonably can be expected to be publicly supported when it applies for tax-exempt status.

 

Please see other issue and information provided by the IRS in this article - http://www.irs.gov/charities/charitable/article/0,,id=184578,00.html

 

You may find the general procedure of creating non-for-profit organization here - http://nonprofit.about.com/od/nonprofitbasics/ht/startingsteps.htm

 

The IRS publication 557 - http://www.irs.gov/pub/irs-pdf/p557.pdf - will be very helpful, but please be aware of changes in the application process mentioned above.

 

Please consider NC Center for Nonprofits - http://www.ncnonprofits.org/ - as additional local resource.

You may want to review the publication - http://www.ncnonprofits.org/faq/HowToStartA501(c)(3)Nonprofit.pdf

 

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Customer reply replied 9 years ago
Ok, I am a little lost. Maybe we are going about this the wrong way. All we want to do is open an acct where we can safely keep money until we need it (or have enough) to accomplish purchasing a new sign and tshirts. I am talking less than $3,000. Is there anyway we can get an EIN number for a Community Watch program and not have to file a tax return at the end or year since it will not be for profit? We want to keep it as simple as possible and not incorporate anything just have a basic community watch association acct for our own record keeping purposes.
Tax Professional: Lev, Tax Advisor replied 9 years ago

You may not obtain a EIN number and open a bank account for the organization that doesn't exist - so you need to create such organization.

As you mentioned above - that will be non-for-profit organization - correct? - so you need to follow rules in creating such organization outlined above - there is no other way to have a formal non-for-profit organization.

 

An exempt organization having gross receipts in each tax year not more than $25,000 - do not file tax informational returns. But you would need to have a determination letter from the IRS to be considered as non-for-profit organization.

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Customer reply replied 9 years ago
ok, I think I am straight now. We need to apply for an EIN then file our Articles of association and the 1023 form with the IRS to become non-profit. Since our receipts will be under $25,000 we should not have to do anything else as far as the IRS is concern. Right?
Tax Professional: Lev, Tax Advisor replied 9 years ago

Yes - that is correct, you still need to keep a record in case the IRS would audit your organization.

 

Because you will be in charge of the non-for-profit organization - you may want to read publications I referenced above - especially the IRS publication 557.

and publication of NC Center for Nonprofits - http://www.ncnonprofits.org/faq/HowToStartA501(c)(3)Nonprofit.pdf - as it describes some additional state regulations.

 

But generally - you are correct.

Lev
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Customer reply replied 9 years ago
Thank you for your help.
Tax Professional: Lev, Tax Advisor replied 9 years ago
Appreciate your warm words. I wish you the best.
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