Ingleside, TX asked in Criminal Law, Tax Law, Business Formation and Business Law for Texas

Q: How does a non-profit change leadership and what happens to the EIN when a new owner comes and the old leaves?

I am the founder of a Texas non-profit corporation (Corporated in the State of Texas) and also Chairman/CEO. I applied for the EIN being used under my own info (Name, SSN) on the IRS site. I’m stepping down completely from operations due to conflict of interest with the board and need help in how to transition. The Board I’m leaving behind does not keep track of the annual filings and will more than likely not file as required with IRS as most are members from other boards who have had their own 501 revoked and funds mismanaged. I don’t want to be associated with the organization in anyway and my concerns are the current exempt EIN being stuck to my name; of course my board said we don’t need a new EIN since I’ve done the paperwork for them to get 501 status but I read that EIN are not transferable. In addition, am I able to close our business bank account and have the Board and new officers reopen it.

1 Lawyer Answer
D. Mathew Blackburn
D. Mathew Blackburn
Answered
  • Tax Law Lawyer

A: Non-profits don't have owners. They a board of directors and officers. When you applied for the EIN you listed yourself as a responsible party that can be changed by filing a form 8822-B or by filing Form 990.

You can't establish a non-profit under your SSN so you may have an unqualified entity and need to file forms for a for profit entity and then convert.

Given that this situation is a huge mess I would hire a professional to make sure that you have no personal liability. The board should do the same.

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