All Types of Organizations and Structures

 

Bankruptcy Estate (Individual)      Back to Top

A bankruptcy estate is a separate and distinct taxable entity from the individual debtor, created when an individual debtor files for bankruptcy under Chapter 7 or 11. When an individual files for bankruptcy under these chapters of the bankruptcy code, a separate estate is created consisting of property held by the debtor as of the beginning of the case. Under some circumstances, this estate also consists of property acquired by the debtor and the estate after commencement of the case.

Block/Tenant Association     Back to Top

Block associations are made up of neighborhood residents who combine to promote the safety and general welfare, and work to preserve and improve the quality of life in their immediate community.

Tenant associations (or tenant organizations) may be made up of tenants who live in a certain building or development, or may be on a larger scale -- i.e. renters in a city who belong to a county or citywide tenant association.

Charitable Lead Annuity Trust      Back to Top

A charitable lead annuity trust is one form of a charitable lead trust. The overarching term "charitable lead trust" refers to an arrangement in which property income or investment income is given to a charity while the grantor is living, but the principal passes to other designated parties upon the grantor's death.

In a charitable lead annuity trust, the trust pays a fixed percentage of the initial value of its assets to the charity for the charitable term.

Charitable Lead Unitrust      Back to Top

A charitable lead unitrust is one form of a charitable lead trust. The overarching term "charitable lead trust" refers to an arrangement in which property income or investment income is given to a charity while the grantor is living, but the principal passes to other designated parties upon the grantor's death.

In a charitable lead unitrust, the trust pays a percentage of the value of its assets, determined annually, to a charity for the charitable term.

Charitable Remainder Annuity Trust     Back to Top

A charitable remainder annuity trust is one form of a charitable remainder trust. The overarching term "charitable remainder trust" refers to an arrangement in which property or money is donated to a charity, but the donor (called the grantor) continues to use the property and/or receive income from it while living.

In a charitable remainder annuity trust, the trust pays a fixed dollar amount to charity annually.

Charitable Remainder Unitrust      Back to Top

A charitable remainder unitrust is one form of a charitable remainder trust. The overarching term "charitable remainder trust" refers to an arrangement in which property or money is donated to a charity, but the donor (called the grantor) continues to use the property and/or receive income from it while living.

In a charitable remainder unitrust, the trust pays a fixed percentage of its value to charity annually.

Church     Back to Top

For tax purposes, a "church" refers to any organization claiming to be a church or any convention or association of churches. The word "church" includes temples, mosques, and other houses of worship. To be considered a church for tax purposes, a group must be part of an organized religion, must have a mission statement, and must be formally organized as a distinct legal entity. Certain characteristics are generally attributed to churches. They include:

  • A distinct legal existence and religious history
  • A recognized creed, form of worship, and literature of its own
  • A definite and distinct ecclesiastical government including a formal code of doctrine and discipline
  • An organization of ordained ministers, selected after completing prescribed courses of study
  • Established places of worship with regular congregations, religious services, and/or religious instruction for members.

Church-Controlled Organization      Back to Top

A church-controlled organization is a branch of a church, including a men's or women's group, a religious school, a mission society, or a youth group.

Community or Volunteer Group      Back to Top

A community or volunteer group is any specialized interest group that comes together to provide volunteer services. Examples of community or volunteer groups include neighborhood watch groups and preservation societies. These groups generally apply for EINs for banking purposes only.

Conservatorship      Back to Top

A conservatorship is a trust created as the result of a legal process in which the court appoints an individual or organization to make financial decisions for another person who is determined to be financially incapable of making those decisions. A person under conservatorship is a conservatee, or protected person.

Corporation     Back to Top

A corporation is a legal entity established by a charter granting it certain legal powers, rights, privileges, and liabilities. A corporation can be established by a person or group of people with a charter from the state's secretary of state. After a corporation is created, it becomes its own entity and generally has an indefinite lifespan.

Custodianship      Back to Top

A custodianship is a trust set up for a minor or incapacitated person.

Employer Plan (401K, Money Purchase Plan, etc.)      Back to Top

A permanent arrangement under which an employer provides benefits for employees.

Employer/Fiscal Agent (under IRC Sec 3504)     Back to Top

An employer/fiscal agent under Internal Revenue Code (IRC) Sec 3504 is an agent for a disabled person. This agent takes care of employment taxes for which the disabled individual is responsible. These taxes are the result of the disabled person using federal, state, or local government funds to pay for their own home care.

Escrow     Back to Top

Escrow is a legal arrangement whereby an asset (often money, but sometimes other property such as art, a deed of title, website, or software source code) is delivered to a third party (called an escrow agent) to be held in trust pending a contingency or the fulfillment of a condition or conditions in a contract. When the set condition or conditions are met, the escrow agent delivers the asset to the proper recipient; otherwise the escrow agent is bound by his or her fiduciary duty to maintain the escrow account.

Estate     Back to Top

An estate (or decedent estate) or succession is a legal entity created as a result of a person's death. The estate consists of the real estate and/or personal property of the deceased person. The estate pays any debts owed by the decedent, and distributes the balance of the estate's assets to the beneficiaries of the estate.

Farmers' Cooperative     Back to Top

A farmers' cooperative is a farmers', fruit growers', or like association organized and operated on a cooperative basis to:

  • Market the products of members or other producers and return to them the proceeds of sales, less necessary marketing expenses, or
  • Purchase supplies and equipment for the use of members or other persons and turn over the supplies and equipment to them at actual cost, plus necessary expenses.
Members in a cooperative share in the profits and participate in the management of the association.

FNMA (Fannie Mae)     Back to Top

The Federal National Mortgage Association (FNMA), commonly known as "Fannie Mae," is a financial services company serving the home mortgage industry. The company offers banks and other mortgage lenders financing, credit guarantees, technology, and services so lenders can make more home loans to more customers. It is a private, shareholder-owned company formed with a charter from Congress that requires it to support the housing finance system.

GNMA (Ginnie Mae)     Back to Top

The Government National Mortgage Association (GNMA), commonly known as "Ginnie Mae," was created by the federal government as a wholly owned corporation within the U.S. Department of Housing and Urban Development (HUD). Its main purpose is to provide financial assistance to low or moderate income homebuyers by promoting mortgage credit.

GNMA pools channel funds from the securities market into the mortgage market and help increase the supply of credit available for housing. The investors receive a monthly pass-through of principle and interest payments on the pooled mortgages.

Government, Federal/Military     Back to Top

The Federal Government/Military category applies to:

  • All U.S. Government executive departments, agencies of the U.S. Government, and corporations wholly or principally owned by the U.S. Government
  • All regular and reserve units of the U.S. Armed Forces, controlled by the Secretaries of Defense, the Army, Navy, and Air Force. This includes the Coast Guard and the National Guard, but not the U.S. Merchant Marine or the American Red Cross
  • Military social clubs, including officers' clubs, enlisted men's clubs, NCO Clubs, officers' open messes, NCO's open messes, billeting funds, etc. These groups generally apply for an EIN for banking purposes only.

Government, Indian Tribal Governments     Back to Top

For tax purposes, federally recognized Indian tribes are treated as independent governments and are generally taxed in the same manner as state or local governments.

There are over 500 federally recognized Indian tribes in the United States. You can find a complete list of these tribes in Revenue Procedure 2002-64. They pay employment taxes, file information returns, and pay certain excise taxes. Indian tribes are generally not subject to federal income tax. This is true for the tribe, as well as any subdivisions or branches of the tribe.

Government, State/Local     Back to Top

Governments generally have the authority to create and enforce laws and impose taxes. A unit of state government has the authority to exercise powers specified under the state's constitution. Examples of primary responsibility of a state include:

  • Protection of lives and property by maintenance of a police force
  • Regulation and improvement of transportation within the state
  • Regulation of business within the state
  • Education.
Local governments are usually subdivisions of states and are created by charter. They generally provide services as specified under state law for a specific area. Types of local government entities include:
  • Municipalities (may be called cities, towns, villages, etc.)
  • Counties or parishes
  • Special districts (schools, fire protection, water, etc.)
  • Regional authorities (transportation, conservation, etc.).
Local governments also include instrumentalities controlled by governments, such as city or county hospitals, recreation centers, etc.

Guardianship     Back to Top

A guardian is a person who has the legal authority (and the corresponding duty) to care for the personal and property interests of another person, called a ward. Usually, a person has the status of guardian because the ward is incapable of caring for his or her own interests due to infancy, incapacity, or disability. Generally, the parents of a minor child are the legal guardians of that child and can designate who shall become the child's legal guardian in the event of their death.

Homeowners/Condo Association     Back to Top

A Homeowners/Condo Association is an organization of homeowners residing within a particular development whose major purpose is to maintain and provide facilities and services for the common enjoyment of the residents.

Household Employer     Back to Top

You are a household employer if you hire someone to do household work in or around your home and that worker is classified as your employee. As a household employer, you will be directing the work of the employee(s) you hire. Some examples of household workers are:

  • Babysitters
  • Nannies
  • Au pairs
  • Cleaning people
  • Housekeepers
  • Maids
  • Drivers
  • Health aides
  • Private nurses
  • Caretakers
  • Yard workers.

IRA     Back to Top

An individual retirement arrangement, or IRA, is a personal savings plan that allows you to set aside money for retirement, while offering you tax advantages. The IRS will only issue an EIN for an IRA trust account if the individual intends to file Form 990-T (Exempt Organization Business Income Tax Return) or Form 1041 (U.S. Income Tax Return for Estates and Trusts).

  • Contributions to an IRA are tax-deductible based on the individual's marriage status and income level
  • Monies contributed to an IRA may be invested in stocks, bonds, mutual funds, annuities, bank savings accounts, certificates of deposit, government bonds, and investment trusts
  • Contributions cannot be of more personal and immediate investments such as a home or collectibles.

Irrevocable Trust     Back to Top

In an irrevocable trust the grantor has no control of the trust (the trust cannot be repealed or annulled) and the trust will pay tax.

Joint Venture     Back to Top

A joint venture is a partnership formed between two or more business entities. These businesses join together and share risk or expertise on a specific project or group of projects. A joint venture is not incorporated or a limited liability company (LLC); it is not a joint undertaking merely to share expenses.

Memorial or Scholarship Fund     Back to Top

A memorial or scholarship fund is set up in memory of someone who has died. The family may request that donations in memory of their loved one be sent to a specific charity, church, or school. Scholarship funds provide monies to be awarded to deserving students in the future.

Multi-Member Limited Liability Company (LLC)     Back to Top

A domestic LLC with two or more members is considered multi-member. Members in an LLC can be either individuals or other organizations. The default classification of a multi-member LLC is a partnership.

National Guard     Back to Top

The National Guard are U.S. military reserve units that are controlled by individual states and equipped by the federal government. They can be called into service by either federal or state governments. For more, see the glossary entry for Federal Government/Military.

Other Non-Profit/Tax-Exempt Organizations     Back to Top

Non-profit organizations include corporations, trusts, limited liability companies, and unincorporated associations that qualify for tax-exempt status under Internal Revenue Code (IRC) 501(a) as described in Publication 557 (Tax-Exempt Status for Your Organization).

Non-profit organizations include: public charities, private foundations, educational organizations, employee associations, veteran's organizations, business leagues, state-chartered credit unions, child care organizations, and teachers' retirement fund associations. This list is not all-inclusive.

Sole proprietors and partnerships cannot be considered for tax-exempt status. For-profit organizations cannot be considered for tax-exempt status.

Partnership     Back to Top

An unincorporated organization with two or more members is generally classified as a partnership for federal tax purposes if its members carry on a trade, business, financial operation, or venture and divide its profits. However, a joint undertaking merely to share expenses is not a partnership. For example, co-ownership of property maintained and rented or leased is not a partnership unless the co-owners provide services to the tenants.

  • Partners can be individuals, corporations, trusts, estates, and other partnerships.
  • Each partner contributes money, property, labor or skill, and expects to share in the profits and losses of the business.
  • A partnership does not pay tax on its income, but "passes through" any profits or losses to its partners. Partners must include partnership items on their tax returns.

Two common forms of partnerships are general partnership and limited partnership.

Personal Service Corporation     Back to Top

A personal service corporation is a person or group of people who establish a legal entity by filing articles of incorporation with the state's secretary of state granting it certain legal powers, rights, privileges, and liabilities. A personal service corporation is an organization in which the activity involves the performance of services in the field of health, law, engineering, architecture, accounting, actuarial science, performing arts, or consulting.

In a personal service corporation, substantially all of the stock is owned by the employees who perform the services. A personal service corporation sells its ideas or expertise rather than tangible goods. A personal service corporation is not a sole proprietor or partnership.

Plan Administrator     Back to Top

The plan administrator is a person specifically designated to carry out the plan's day to day operations. The plan administrator has a fiduciary responsibility to the participants under the plan. Duties of the plan administrator may include:

  • Record keeping
  • Accounting tasks
  • Legal and trustee services.

Political Organization     Back to Top

A political organization is:

  • An organization that influences the selection, nomination, election, or appointment of any individual to any public office or office in a political organization
  • An organization created and operated primarily for the purpose of accepting contributions, making expenditures, or both
  • A party, committee, association, or fund (including a separate segregated fund described in Section 527(f)(3) set up by a Section 501(c) organization, or a similar organization).

Pooled Income Fund      Back to Top

A pooled income fund is one form of a charitable remainder trust. The overarching term "charitable remainder trust" refers to an arrangement in which property or money is donated to a charity, but the donor (called the grantor) continues to use the property and/or receive income from it while living.

In a charitable pooled income fund, the donor transfers assets (usually cash) to a trustee, and those assets are commingled and invested in a "pooled" fund with other donors' gifts. The donor receives a portion of the total income from the fund annually. When the donor dies, his or her remainder interest in the fund is conveyed to the charity.

PTA/PTO or School Organization     Back to Top

Parent-teacher associations (PTAs) act on behalf of the student. They speak to local and federal government on issues dealing with students.

Parent-teacher organizations (PTOs) are most often single-school groups that operate under their own bylaws and concentrate on activities at their building or in their town only.

School organizations are usually created by each school and are independent from similar groups at other schools. Some examples of school organizations are: high school marching bands and junior varsity cheerleading squads.

Qualified Funeral Trust     Back to Top

A qualified funeral trust (QFT) is a grantor trust, where the grantor purchases funeral services prior to death, and the applicable funeral home files one income tax return for all separate trusts. The trust is treated as a non-grantor trust if the following conditions are met:

  • The trustee makes an election under IRC section 677(a)(3)
  • Each trust is treated separately for tax rates
  • The contributions are invested for funeral services of the stated person only.

Real Estate Investment Trust (REIT)     Back to Top

A real estate investment trust (REIT) is an investment vehicle established for the benefit of a group of real estate investors. An unincorporated trust or association, it is managed by one or more trustees, who hold title to the assets of the trust and control its acquisitions and investments.

Receivership     Back to Top

A receivership is a legal or equitable proceeding in which a receiver is appointed for an insolvent corporation, partnership, or individual to preserve its assets for the benefit of affected parties.

Regulated Investment Conduit (RIC)     Back to Top

The label regulated investment conduit (RIC) refers to a domestic corporation that meets the following criteria:

  • It is registered throughout the tax year as a management company or unit investment trust under the Investment Company Act (ICA) of 1940.
  • It has an election in effect under the ICA to be treated as a business development company, or
  • It is a common trust fund or similar fund that is neither an investment company under section 3(c)(3) of the ICA nor a common trust fund as defined under section 584(a).

REMIC     Back to Top

A real estate mortgage investment conduit (REMIC) is an entity formed for the purpose of holding a fixed pool of mortgages secured by interests in real property. A REMIC issues regular and residual interest to investors, paying each shareholder his or her fair share of income generated from the REMIC.

Revocable Trust     Back to Top

A revocable trust is a trust that may be altered or terminated during the grantor's lifetime. Since the trust may be altered at any time until the grantor's death, it is considered part of the grantor's estate and is subject to taxation. The property is passed on to the beneficiaries only after the grantor's death, and the revocable trust then becomes irrevocable.

S Corporation     Back to Top

A corporation is a person or group of people who establish a legal entity by filing articles of incorporation with the state's secretary of state granting it certain legal powers, rights, privileges, and liabilities. An S corporation is an eligible domestic corporation that wants to avoid double taxation (once to the shareholders and again to the corporation) by electing this status using Form 2553 (Election by a Small Business Corporation).

Generally, an S corporation is exempt from federal income tax other than tax on certain capital gains and passive income. An S corporation is not a sole proprietor or partnership.

Settlement Fund (under IRC Sec 468B)     Back to Top

A designated settlement fund or qualified settlement fund is a trust or fund established under IRC Sec 468B. This code section permits a defendant to deposit money or property into a trust or fund and receive a full and complete release of liability.

Single-Member LLC     Back to Top

A single-member LLC is an LLC with only one member, who can be an individual or another organization. Since you are a single-member LLC, we must initially classify you as a disregarded entity. This means the LLC is ignored or "disregarded" for the purpose of filing a federal tax return. This is only a mechanism for tax purposes. It does not change the fact that the business is legally a limited liability company.

Social or Savings Club     Back to Top

A social club is organized for pleasure, recreation, and other similar non-profitable purposes and substantially all of its activities must be for these purposes.

A savings club is organized to offer benefits and services to its members for purposes of saving money on purchases. Some types of savings clubs include: grocery savings, airline/cruise savings, and home décor savings.

Sole Proprietor     Back to Top

A sole proprietor is one individual who owns a company that is not incorporated or registered with the state as a limited liability company (LLC). Sole proprietors may or may not have employees.

In a sole proprietorship:

  • The business does not exist separately from the owner.
  • The risks of business apply to the individual's personal assets, including those not used for the business.
  • The sole proprietor reports business income on his or her individual tax return.

Sports Teams (community)     Back to Top

These organizations are comprised of sports teams or clubs primarily participating in live sporting events before a non-paying audience. Examples include bowling leagues and little league teams. These groups generally apply for EINs for banking purposes only.

Trust (All Others)     Back to Top

A trust is a legal entity created under state law and taxed under federal law in which one party holds assets for the benefit of another. A trust is required to file a Form 1041 (U.S. Income Tax Return for Estates and Trusts) to report its income, deductions, gains, and losses.

Withholding Agent     Back to Top

A withholding agent is an agent, broker, fiduciary, manager, tenant, or spouse who is required to withhold taxes on income, other than wages, paid to a non-resident alien.