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.
Please use this mailing address with the IRS, California FTB, and your bank:
[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.
When completing Form 3500:
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