Q. We have been asked to open accounts by individuals (not established entities such as the Red Cross) that would enable them to collect funds for disaster relief, such as money for the families of the Boston Marathon victims. Is there anything we need to consider when establishing such accounts? A. Yes. The customer would need to comply with relevant IRS requirements and also need to incorporate under a state's nonprofit corporation law, or set up an unincorporated nonprofit association. The organizing document would need to state that it is organizing under Internal Revenue Code Section 501(c)(3). After the initial set-up, the customer would need to apply for a EIN (tax ID number) and then could apply for the IRS exemption determination letter which could be effective retroactively to the date the organization was established.
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