Tax and Legal Status Disclaimer
General and Affiliated student organizations are not legal entities of the University of Iowa, and thus are not tax-exempt or nonprofit by virtue of their existence or registration as a student organization. Student organizations may choose any bank/credit union and are responsible for their own finances and any associated tax and legal reporting. The following information is not financial or legal advice. Seek outside assistance from accounting and/or law firms if you need further information or advice.

Conducting Business with the University of Iowa
The University of Iowa will only transact business with entities that are a registered student organization, have an active Federal Employer Identification Number (FEIN), and an active bank or credit union account established in the student organization’s name. 

1. Apply to start a registered student organization. The process will require that you provide your organizing document (constitution and/or bylaws) which would include your organization’s purpose, officers, signatures, etc.
2. Obtain a Federal EIN from the IRS by applying online. 
   1. Need more information about the EIN? Can't find the EIN for your organization? Need another copy of your EIN letter? IRS webpage for EINs.
3. When you apply online, you may be asked to identify your organization's type of legal structure. The vast majority of student organizations would most likely fall under 501(c)(7) (social clubs) which is a type of Federal tax-exempt organization.  Learn more about the legal designation of a Social Clubs on the IRS website.  Caution: Completing step 3 does not make your organization tax exempt. You must also apply and get approval for tax exemption (see below steps) 
4. Open a bank/credit union account in the name of your organization. The financial institution will require at a minimum the following to open an account and/or updating account signers:
   1. Organizing documents such as constitution/bylaws with officers and proposed account signers listed (same individuals should be listed on Engage)
   2. EIN number (see step 2 above)
   3. The account signers for the account will need to be present when you meet with the financial institution
5. Complete a Streamlined University Vendor Application for Student Organizations found here and email to paul-braem@uiowa.edu
6. Apply for federal tax-exemption using electronic form 1024 at Pay.gov . As stated in step 3, most organizations would most likely fall under 501(c)(7) (social clubs). 
   1. Information on filing annual tax returns from the IRS website: “Although they are exempt from federal income taxation, social clubs are generally required to file annual returns of their income and expenses with the Internal Revenue Service. In addition to filing an annual exempt organization return, social clubs may be required to file other returns and pay employment taxes. Some clubs may be required to file certain returns electronically.”
   2. Upon approved application: A tax-exempt organization must make available for public inspection its approved application for recognition of exemption with all supporting documents available and its last three annual information returns. The organization must provide copies of these documents upon request without charge (other than a reasonable fee for reproduction and copying costs). Penalties are provided for failure to comply with these requirements.

Best practices:

Income and Expense Tracking
Student organizations should track all income and expenses on a regular basis using a general ledger (record of all transactions) in addition to the organization’s bank statements. Officers with financial responsibilities should prepare and analyze financial reports monthly for organization leadership and additionally share the financials with the group’s members on a regular basis. 

Record Retention
Create an internal record-keeping system, retention policy and schedule, and document destruction plan. This would include all official documents, communications, meeting minutes, bylaws, important login info, IRS information, etc.