Question: EIN tied to what?

My PTO doesn't want to use our school's tax id and it doesn't want to get an EIN because people think it must be tied to a member's SS#. 1. What's wrong with using the school tax id? 2. Is it true that an EIN must be tied to a person and not to a group? Just not sure how it works.

Asked by ErinTM

Answers:

Advice from PTO Today

Craig writes:
Hi Erin -- Glad you asked that; a lot of people are confused on this topic. When you apply for an EIN for your group, the IRS asks for an individual's social security number on the application. This began, if I remember correctly, as part of the Patriot Act. It's meant to prevent people from setting up dummy corporations with no real purpose other than to conceal what's really going on (often money laundering). The IRS says the social security number is for identification purposes only. The person who gives his social security number on the application isn't liable or responsible for the group's activities in any way. It's just a way to discourage illegal activity. As far as using the school's tax ID, it's a can of worms. Every dollar you raise belongs to the school. Every dollar you spend is a school expenditure. At some point, control of that money will become an issue. You're much better off taking the simple step of getting an EIN and thus becoming independent.

Community Advice

ErinTM writes:
Thank you very much. That makes sense. I will pass the info to the officers in my PTO. Thanks again!

Community Advice

jodyC*73 writes:
Ok...thanks for the response. Soooo.....is that number only used for the application process. After that, what happens to it? We are unable to get anyone to offer his/her number because this entire process seems a tad ambiguous.