The Nonprofit FAQ

How do we get our Federal tax-exempt number?

Sandy Deja ([email protected]) wrote to NONPROFIT on Sept 7, 1998: *selah* asked, "Last year someone asked us for our Federal ID Number (04-*****) in order to verify us. Anyone know what this is and/or how to get one? (This is not the IRS number.)" The Federal ID number is the same as the FEIN, or the IRS ID number - an identifying number for corporations, associations and other such entities, regardless of whether the organization is tax exempt, and regardless of whether the organization has employees. This number begins with two digits, which usually indicate the state where the organization is located (91- here in Washington state) and is followed by seven additional digits, which are given out in numerical order, so can give a rough indication of how long the organization has been in existence. If you are quite certain the folks asking for your number do not want this number (and the number of digits specified seems to indicate that is the case) they may be seeking what is sometimes called a "tax exempt number." Unfortunately, this number does not really exist. Years ago, all IRS letters recognizing tax exempt status were given numbers by the IRS. The letter numbering system was strictly internal - a way of tracking productivity for IRS management, and a tool used for randomly selecting exemption letters for review. Although this number was for internal use only, it did appear on the exemption letter, and many people got the impression that it was, in fact, the number that "proved" the organization was exempt. So maybe that's the number those folks were asking for. You can show them this e-mail if you like. There is no number which, by itself, can prove that your organization is tax exempt. The best proof that an organization has been recognized by the IRS is the exemption letter itself. Next best is a listing in the current IRS publication 78, which can also be found on the internet at http://www.irs.gov/exempt/display/0,,i1=3&genericId=6873,00.html. (I was an IRS Exempt Organizations Specialist from 1974 to 1986.) Further.... Exemptions from state and local taxes for nonprofit organizations are entirely a matter of local law. To find out whether your organization can benefit from any special tax treatment, you will need to contact local tax or revenue departments for the jurisdictions -- states and cities -- where you operate. If there is a state association of nonprofits in your state (try replacing "US" in this URL with the two-letter abbreviation for your state), you may be able to get a head start on the necessary research by checking with them. There is an ID number required for getting federal grants (since October 2003). For more about the DUNS number, see http://www.nonprofits.org/npofaq/19/38.html Arts organizations have an additional reason to secure a DUNS number, even if no donor requires it. That's because Americans for the Arts (http://www.americansforthearts.org) has developed an advocacy tool -- the Creative Industries project -- using the DUNS number to identify each for-profit and nonprofit arts-related business in the country. Accurate information will support this combined effort to increase awareness of the national scope of the arts industry. Posted September 8, 1998; note on state and local taxes added 4/12/01; note on DUNS number added 11/9/04 -- PB