Hi tony22,
1) "i am a little confused about the purpose of the two identification
method listed above ie tax id and employer identification number.what
are the similarities and differences between the two ids?"
FOR INDIVIDUALS WITHOUT SOCIAL SECURITY NUMBERS:
Tax I.D: Individual Taxpayer Identification Number (ITIN):
"Federal law requires individuals with U.S. income, regardless of
immigration status, to pay U.S. taxes. The ITIN, a nine-digit number
that begins with the number 9, was created for use on tax returns for
those taxpayers who do not qualify for a Social Security Number."
http://www.irs.gov/newsroom/article/0,,id=112728,00.html
FOR ALL BUSINESSES:
Employer Identification Number (EIN):
"About EINs: An Employer Identification Number (EIN), also known as a
Federal Tax Identification Number, is a nine-digit number that the IRS
assigns to business entities. The IRS uses this number to identify
taxpayers that are required to file various business tax returns. EINs
are used by employers, sole proprietors, corporations, partnerships,
non-profit organizations, trusts and estates, government agencies,
certain individuals and other business entities."
http://www.irs.gov/businesses/small/article/0,,id=102767,00.html
2) i will like to know whether foundations and trust funds with tax
exemption status posses tax id?
Yes, even tax exempt organizations need tax identification (EIN).
3) if such a foundation is to transact a business what will it present
as a tax id?"
All businesses (including foundations and trust funds) need an
Employer Identification Number (EIN), whether it has employees or not.
Without it, you will not be able to apply for tax exempt status.
PAGE 9: Forms to File: FORM SS-4:
"An employer identification number (EIN) is your account number with
the IRS and is required regardless of whether the organization has
employees. Include the organization?s EIN on all correspondence to the
IRS.
Apply for an EIN by completing Form SS-4, Application for Employer
Identification Number, by calling toll-free (800) 829-4933, or by
submitting an online version of the form via www.irs.gov. Form SS-4 is
available at Social Security Administration offices, by request
through the IRS at (800) 829-3676, and by downloading the form from
the IRS Web site at www.irs.gov. For more information about EINs, see
Publication 1635, Understanding Your EIN."
http://www.irs.gov/pub/irs-pdf/p4220.pdf
FORM SS-4: Application for Employer Identification Number:
http://www.irs.gov/pub/irs-pdf/fss4.pdf
The next step is to determine if the foundation or trust is eligible
for "501(c)(3) status". If so, it will be exempt from paying federal
income tax.
PAGE 12: Tax Publications for Exempt Organizations:
Get publications via the Internet or phone (800) 829-3676:
Pub 517, Social Security and Other Information for
Members of the Clergy and Religious Workers
Pub 526, Charitable Contributions
Pub 557, Tax-Exempt Status for Your Organization
Pub 578, Tax Information for Private Foundations and Foundation Managers
Pub 598, Tax on Unrelated Business Income of Exempt Organizations
Pub 1771, Charitable Contributions? Substantiation and Disclosure Requirements
Pub 1828, Tax Guide for Churches and Religious Organizations
http://www.irs.gov/pub/irs-pdf/p4220.pdf
PAGE 13: Forms for Exempt Organizations
Get forms via the Internet or through your fax machine
(see IRS Tax Fax, page 12):
Form SS-4, Application for Employer Identification Number
Form 990, Return of Organization Exempt From Income Tax
Form 990-EZ, Short Form Return of Organization Exempt From Income Tax
Form 990-PF, Return of Private Foundation or Section 4947(a)(1)
Nonexempt Charitable Trust Treated as a Private Foundation
Schedule A, of Form 990 or 990-EZ, Supplementary Information ?
Organization Exempt Under Section 501(c)(3)
Schedule B, of Form 990, 990-EZ, or 990-PF, Schedule of Contributors
Form 990-T, Exempt Organization Business Income Tax Return, (and proxy
tax under section 6033)
Form 990-W, Estimated Tax on Unrelated Business Taxable Income for
Exempt Organizations (and Investment Income for Private Foundations)
Form 1023, Application for Recognition of Exemption Under Section
501(c)(3) of the Internal Revenue Code
Form 2848, Power of Attorney and Declaration of Representative
Form 8821, Tax Information Authorization
http://www.irs.gov/pub/irs-pdf/p4220.pdf
PAGE 5: Public Charities and Private Foundations
PAGE 7: What responsibilities accompany 501(c)(3) status?:
Recordkeeping
Filing Requirements
Disclosure Requirements
http://www.irs.gov/pub/irs-pdf/p4220.pdf
FORM 1023:
"Complete Form 1023, Application for Recognition of Exemption Under
Section 501(c)(3) of the Internal Revenue Code, and mail to the
address indicated in the instructions. The required user fee must
accompany Form 1023.The IRS will not process an application until the
user fee is paid. In some cases, an organization filing Form 1023 must
also file Form 872-6 consenting to an extension of the statute under
which the IRS can assess tax on net investment income for private
foundations."
http://www.irs.gov/pub/irs-pdf/p4220.pdf
FORM 1023: Application for Recognition of Exemption:
http://www.irs.gov/pub/irs-pdf/k1023.pdf
Compliance Guide for 501(c)(3) Tax-Exempt Organizations:
"Explains the record keeping, report filing, and disclosure rules that
apply to organizations that have tax-exempt status under section
501(c)(3)."
http://www.irs.gov/pub/irs-pdf/p4221.pdf
FORMS 2848 and 8821:
"Attach Form 2848, Power of Attorney and Declaration of
Representative, if someone other than your principal officer or
director will represent you on matters about the application. Attach
Form 8821, Tax Information Authorization, if you want the IRS to be
able to provide information about your application to an employee
other than a principal officer or director."
http://www.irs.gov/pub/irs-pdf/p4220.pdf
FORM 2848: Power of Attorney and Declaration of Representative:
http://www.irs.gov/pub/irs-pdf/f2848.pdf
FORM 8821: Tax Information Authorization:
http://www.irs.gov/pub/irs-pdf/f8821.pdf
Employment Tax Requirements:
http://www.irs.gov/businesses/small/article/0,,id=100688,00.html
I hope I've been able to sort this out for you in an understandable
way. If you have any questions, please do not hesitate to post a
clarification request before closing/rating my answer and I will be
happy to respond.
Thank you,
hummer
IRS Website Search Terms Used:
foundations and trust funds
Taxpayer Identification Number
EIN
Section 501(c)(3)
FORM SS-4
FORM 1023
FORM 2848
FORM 8821 |
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