Many journals maintain checking accounts in outside banks comprised of membership dues to be used for items which are not eligible or available for purchase with University funds.   These accounts are in no way associated with the University, and as such cannot be opened using the University’s Tax ID number.  

We recommend each journal apply for both a Federal (EIN) and State Tax ID number and use these numbers to open your Journal checking account.  This  allows for you to open the account using the journal Tax ID, as opposed to individual members using their individual social security numbers, which could potentially carry a risk of liability.

To obtain a Tax ID number, you will need to register with both the IRS as well as the California Franchise Tax Board (FTB).  It is recommended that you file with the IRS first, and then the state, as although the state has its own numbering system, the Federal ID number can be recorded alongside the FTB number for reference.

Details are outlined below, and are also included in this pdf.

You can apply online at https://sa2.www4.irs.gov/modiein/individual/index.jsp or by phone at 1-800-829-4933.

When you start the process, it asks you to identify what type of organization you are. 

1. If you apply online, choose the button that says, “View additional types, including tax-exempt and governmental organizations.” Then select “Social or Savings Club.” If you apply by phone, tell the IRS staff person that you are a “Social or Savings Club.”
2. Prepare a brief description of your group and its mission.
3. The application will ask for your name and SS#.  This information is just to verify that someone is legitimately requesting the Tax ID.  It is not used for reporting purposes. 
4. You will not need to file taxes, but you will need to file an “Info Return” after the end of your first fiscal year and then annually. We advise you to set your journal’s fiscal calendar to the calendar year, as opposed to the academic year, and then setting the reporting due date of April 15. 

Please use this mailing address with the IRS, California FTB, and your bank:

Journal Name
Berkeley Law
[add room number] Boalt Hall
University of California
Berkeley, CA  94720-7200

Applying for a California Tax ID is a bit more difficult than for the Federal Tax ID, and the forms you will need to submit require more time and documentation.

• You will need to file Form 3500 and pay a $25 fee 
• You can apply online at:
  https://www.ftb.ca.gov/businesses/Exempt_organizations/Applying_for_tax-exemption.shtml
• You should download the 3500 booklet which provides in depth guidelines, instructions, and samples  regarding how to complete the form: https://www.ftb.ca.gov/forms/misc/3500bk.pdf  

When completing Form 3500: 

1. Type of Exemption:  Register as a Social and Recreational Organization (R&TC Section 23701g)
2. For guidelines and samples of Creating Documents (Journals are considered Unincorporated Associations- refer to sample L), or Bylaws, see page 33 of the 3500 booklet.
3. You will not need to file taxes, but you will need to file an “Annual Information Return” (199N e-Postcard) https://www.ftb.ca.gov/businesses/Exempt_organizations/Filing_Requirements_Form_199N.shtml
   This needs to be filed at the end of your first fiscal year and then annually. We advise you to set your journal’s fiscal calendar to the calendar year, as opposed to the academic year, and then setting the reporting due date of April 15. 

Part III- Financial Data

You will be asked to provide 3 years of gross receipts and expense statements.  The requested financial information should be based on your journal’s external checking account, NOT the funds which are held and expensed by the University.  Knowing how time consuming and perhaps costly it would be to itemize the requested 3 years of financial data on Side 4 of the application, a past Berkeley Law CFO spoke to an FTB Agent, and inquired whether because the journals are small, student groups and the scope of their activities doesn't really change much, they might use the current year to estimate prior years.  The Agent indicated yes, this could be done, but that you would need to mark the Form 3500 as estimates and perhaps add a note that they're students, leadership changes, and no one knows where past bank statements are.

This section of Form 3500 is used to determine if a group is under the monetary threshold such that they could e-file and such that they didn't have to pay an application fee.

If you have any additional questions regarding any of these tax-related issues, please contact:

Federal Internal Revenue Service:
https://sa2.www4.irs.gov/modiein/individual/index.jsp   or  1-800-829-4933

California Franchise Tax Board:
https://www.ftb.ca.gov/businesses/Exempt_organizations/Applying_for_tax-exemption.shtml or 1-800-852-5711