Most people ask, “If a non-profit organization has an EIN, does it mean it is a tax-exempt firm?”
The answer to the question is no. The only document that proves a non-profit organization has been granted with tax-exemption privilege is the IRS Determination Letter.
As you may know, every 501(c)(3) non-profit organization received this kind of letter when the court or IRS allowed them to have a tax-exempt status. The letter that a non-profit organization received should be kept safe so it can be copied by anyone who requests to see it. Also, funders like government agencies, foundations, will ask a copy of this Determination Letter before signing a contract or giving them a grant.
It is uncommon for a small non-profit organization to misplace or lost its IRS Determination Letter. Making it hard for donors to know if the organization is tax-exempt or not. Also, for new board members who want to be informed that the non-profit organization they agreed to help is a bona fide charity.
A charity that has forgotten or misplaced their Determination Letter may try to prove that they have EIN. Unluckily, this won’t work.
If the determination letter is cannot be found or really misplaced, there’s a solution for that. The non-profit organization can request a new one from the IRS. There’s a form to fax or mail, and of course, you must know your current EIN.
For non-profit EIN assistance, visit irs-taxid-numbers.com for more information.
What is EIN for Non-Profit Organization?
All form of business, including a non-profit organization, is needed to have an EIN or Employer Identification Number. The IRS utilizes that unique number to identify what type of business entities that you have. The organization’s EIN is equivalent to the individual’s social security number.
An EIN works like the individual’s SSN (Social Security Numbers). An EIN sample format is like this: XX-XXXXXXX. The EIN is issued by the IRS and can be utilized for any legal activities of the organization. There are other names connected for EIN, like Federal Employer Identification Number or FEIN, and Federal Tax Identification Number (TIN).
Besides, your organization needs EIN even if you don’t have any paid employees. Because the number is utilized for many of your legal business tasks like:
- Hiring employees
- Opening a debit and credit account
- Applying for a license, yes, even a non-profit organization might need to have one like a business license from the local government.
Apply for EIN as soon as the organization has been set-up legally. If you want the organization to become a non-profit legal firm, incorporate it as a non-profit firm in your state. Once granted, it is vital to protect the organization firm as many frauds and scammers will use it for their malicious intention.
Apply for the Organization EIN
The person applying for the organization EIN must be duly responsible and authorized member of the exempt organization. Your authorized incorporator can also file an EIN on your behalf.
That authorized person will use his SSN for the application. But once the EIN has been created, no individual’s SSN is needed.
The person who’s applying for the organization EIN should have his or her SSN, the organization’s complete legal name, and the correct mailing and physical address of the organization.