[Foundation-l] Wikimedia Pennsylvania

Thu Jul 12 17:42:09 UTC 2007

Anthony wrote:
>
>
> By all means if you have reason to incorporate you should do so.  But
> tax exemption doesn't seem to be a reason.  I just checked out the
> sales tax exemption process for Pennsylvania.  They don't require
> incorporation, and they don't require an IRS determination letter.
>
> Furthermore, the simple act of incorporation is relatively inexpensive
> once you get beyond just meeting for pizza.  What really costs money
> are the administrative costs, and these costs are probably reduced by
> having separate legal entities.
>
>   

Out of curiosity in this situation, does that mean that the IRS uses 
your SSN as the EIN to determine non-profit status?  I would imagine 
that the IRS in particular is much more inclined to audit somebody 
claiming non-profit status in this situation if you are accepting 
donations as an individual and not in behalf of a non-profit 
corporation.  I'm talking tax-exemption both for people donating the 
money to the organization as well as getting non-profit status for 
spending the money once you have it.  And what happens once that 
individual dies, moves on to other things, or goes nuts and does things 
the rest of the group doesn't agree with?  Start all over again?

It still takes somebody willing to stick their neck out for liability 
purposes as well, and I'm not so sure if that is necessarily something 
that should be expected for volunteers trying to give a little bit of 
structure to what is going on.  Especially for a group that may number 
dozens or even hundreds of participants.