LK Education Bulletin

One issue we have found in working with School Support Organizations (SSOs) seeking compliance with the state of Tennessee's new accountability regulations is the issue of separate bank accounts for the various clubs included within the organization umbrella.  In the past clubs such as the band and football/basketball boosters have most likely maintained their own separate bank accounts with separate EIN numbers.  An EIN (Employee Identification Number) number is obtained from the IRS by filing a form SS4 and is now required by most banks to open a bank account.  The IRS uses the EIN number as a tax return tracking number.  Where a SSO is seeking to form a single umbrella entity to serve as the consolidating reporting entity for a group of clubs within a geographic school district or area we believe the best practice will be to have all bank accounts opened and maintained using one EIN number.  Using multiple EIN numbers may trigger additional tax filing requirements from IRS.  Using one prevents this confusion and complexity yet still allows the organization the ability to have multiple bank accounts for each of the clubs within the umbrella group should it so choose.  Those bank accounts opened and existing prior to the formation and securing of the umbrella organization's EIN should be re-opened using the new umbrella EIN number.  The accounts can remain under the control of the clubs but proper record keeping and controls should be established so their activities can be included in the umbrella organization for its consolidated IRS reporting.