Starting a Club Bank Account & Maintaining IRS Status

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1 Starting a Club Bank Account & Maintaining IRS Status Types of Accounts for a Circle K Club Each club needs two accounts: a Service Account and an Administrative Account. Whether that translates into two (2) physical accounts or a strong division of funds between two virtual accounts within the Club Budget should be determined based on the cash-on-hand of your local chapter. If your club is financially stable enough to cover the minimum deposits for two accounts, the Alabama District recommends that Service & Administration be kept in separate checking accounts. If your club does not have the cash-on-hand for two checking accounts, care must be taken to ensure that any carryover funds are accounted correctly in the Club Budget. A Sample Club Budget is available at alabamacki.org to help you ensure funds are accounted for correctly. Essentially, the Club will use the administrative account for collecting dues, events, promotions and other expenses not directly relating to service. The Service Account is the keeper of all funds relating to service, including any money raised by the club through fundraising activities counted as Service Hours. The important thing to remember is, while Dues Money can be moved from the Administrative Account to the Service Account, any funds raised through other revenue sources and deposited into the Service Account cannot be moved into the Administrative Account. Tips for Choosing an Off-Campus Bank or Credit Union Although Free Business Checking is available from some Commercial Banks or Credit Union and are the cheapest option for your club, most Business Checking Accounts have a Monthly Service Fee, ranging from $15-$30. In some cases, it may be possible to waive that fee as long as a certain balance in maintained in the account. Likewise, some accounts that do or do not charge a Monthly Service Fee may charge a Transaction fee, based off how many transactions you make on the account. For example, a bank may charge $0.25 for every transaction made on the account. Some accounts will not charge transaction fees up to a certain number of transactions but will begin charging after a specified number of transactions. Speak with a variety of banks for more information on fees before settling on one vendor, and make sure that you are fully aware of any fees that are associated with your account(s).

2 Establishing 501(c)4 Status & Obtaining your Employer Identification Number (EIN) Before obtaining a checking account, any off-campus banking institution will require the club to be officially recognized by the IRS as a 501(c)4 Civic Organization by obtaining a Employer Identification Number, or EIN, from the Federal Government via the IRS. This is very different from a 501(c)3 Tax Deductable Charity or Foundation. This is simply a number, like a Social Security Number for an individual, that the Internal Revenue Service will use to indentify your club. Follow the steps below to get an EIN from the quick and easy online form. 1. Visit to apply for the EIN. Read the User Agreements and click ok to access the rest of the form. 2. Browse through the information and click Begin Application

3 3. Choose View Additional Types and click Continue 4. Choose Community or Volunteer Group and Click Continue

4 5. You will be sent to a page confirming you selection. Just hit continue again. 6. Fill in your personal information and Maintaining IRS 501c(4) Status & Completing the Annual 990-N Every small organization must complete the online 990-N form at the end of each year through the IRS or that organization will lose tax exempt status. The form can be found online at The first time the form is filed, you will need to register as a new user. For every year after that, you will simply have to create your 990-N and submit it to the IRS online.

5 The following information and documentation is needed to fill out the 990-N form: The form Employer identification number (EIN), also known as a Taxpayer Identification Number (TIN). Tax year Legal name and mailing address Any other names the organization uses Name and address of a principal officer Web site address if the organization has one Confirmation that the organization s annual gross receipts are $50,000 or less for tax years ending on or after December 31, 2010). If applicable, a statement that the organization has terminated or is terminating (going out of business)