by Pamarah Gerace, Attorney at Law -
Director, Student Legal Services
and
Michael Wallace
Coordinator, Student Organization Resource Center
To begin with, your organization will need to have a tax identification number. This tax ID number, which is issued by the Internal Revenue Service, is used not only for your non-profit status but also for your bank account or any other official business that relates to your group. Many vendors will require this number to even transact business with your group.
To get a tax ID number for your organization, contact the IRS at 1.800.829.3676 and request that they send you Form SS-4, Application for Employer Identification Number, or download the form and instructions from their website, http://www.irs.gov/businesses/small/article/0,,id=97860,00.html.
Any organization, student or otherwise, that generates income can be liable for paying taxes. If your student organization is going to seek funding or engage in fundraising, you should consider applying for non-profit corporation status through the North Carolina Secretary of State's office and tax exempt status through the NC Department of Revenue. If your income will be over $5000 in a year, you should also consider seeking non-profit status through the Internal Revenue Service. This status is especially helpful if you are going to be seeking contributions. By obtaining the necessary approvals, your group can notify possible donors that their donation would be tax exempt.
At NC State, Student Legal Services will help you determine what status to file for and will assist you in the process at no charge. You can make an appointment by calling 919.515.7091.
The process for filing for non-profit corporation status in North Carolina is not difficult. The packet of information for approval can be obtained by calling the NC Secretary of State's office at 919.733.4201 or downloaded from their website at www.secretary.state.nc.us/corporations/. You will be seeking the packet of information for non-profit corporations. The key components of the packet for non-profit status are the Articles of Incorporation, which include a registered agent, a principal place of business, the initial incorporators and a purpose for the organization. There is a small filing fee.
Once your Articles of Incorporation have been filed with the Secretary of State's office, you usually receive back within a few weeks the approved Articles of Incorporation. The next step is to obtain tax-exempt status from the North Carolina Department of Revenue. That office will contact your registered agent by way of a letter within a month of two of your having had your Articles of Incorporation approved by the Secretary of State. The North Carolina Department of Revenue will request a copy of your Articles of Incorporation, a copy of your constitution and by-laws and a copy of your statement of purpose. Once the Department of Revenue has approved them, you have tax exempt status. This is especially important if your organization will engage in fundraising. Without this approval, you could be responsible for paying taxes on money raised.
If your group expects to have revenues of $5000 or more, then you will have to apply for non-profit and tax exempt status through the federal government, otherwise known as the IRS. That process is quite a bit more involved, both time wise and financially, and usually takes about a year for final approval. It is a necessary step if your group takes in more than $5000 a year. However, if your revenues are less than $5000 a year, the state approval is all that is required.
All official paperwork you receive back from the non-profit incorporation process, the tax exempt status process, and the SS-4 employer identification form and tax ID number issued to your organization should be carefully filed in a safe archive, and not be kept by current officers. Perhaps your advisor would hold them for you, or you may place them in your organization's folder in the Student Organization Resource Center for safe keeping.
Should you have any questions concerning these processes, please make an appointment to come to University Student Legal Services (919.515.7091).
