Obtaining an Identification Number just to open a bank account

What is the name of your state? MA

Our girls softball league wants to open a bank account for the dues collected that we use to buy equipment.

In order to be able to open a bank account, we need an ID number from the IRS, which can be obtained by filing Form SS-4 Application for Employer Identification Number.

The instructions for that form say that it can be used to get an Employer ID number solely for the purposes of opening a bank account (ie you will not have to file any tax returns) and gives the example of dues for a bowling league.

However, what happens when the bank reports the interest earned on the account to the IRS at the end of the year and you do not file a tax return to report it? I have called the IRS and spoken to three different people there and they have all pleaded ignorance??

Thank you.

[abezon]

The IRS computers say, "Interest was under $600? They don't have to file anything," and never bothers you. Any interest income you could earn will be well below the income tax return filing requirement.

Thank you for the reply.

The interest would probably be below $600, especially with interest rates as low as they are now. But this league would be open to all girls in our town so it is not inconceivable that at some point the interest could exceed $600, especially if interest rates go back up.

What would happen then?

[abezon]

To earn $600 interest in a year, you'd have to keep an average daily balance of about $10,000 @ 6%. How likely is this, really? If you won't spend the money that fast, maybe your dues are too high.

If it ever looks like you will actually exceed $10,000, just have 2 accounts -- one for operating expenses & one for capital repairs/improvements. Use 2 different EINs. If you want to get all formal, form a non-profit 503(c) corp. Or you could draw up a non-profit trust and file a trust return every year. Or you could just spend the money fast enough not to get $600 in a year. . . .

Open the account under "Rangerdbs in Trust for the Local Girls Softball League".

Thanks again for the info.

Well, the $10,000 is possible since we've talked about accumulating funds for a new ball field for the girls, which would probably be in a separate account.

And of course we would very much prefer to stay away from having to apply with the IRS as a non-profit 503(c) and have to then file Form 990's with the IRS every year, but it sounds as though we may not have any choice if we have any account that generates that much interest.