Aren't you always required to title an interest bearing deposit account first in the name of the entity associated with the EIN? Specifically, can a Non-Profit that has a EIN establish a deposit account in the name of anything other than the IRS recognized name? I have an attorney telling me that I don't have to set the account up as DBA, that the EIN can be used on "side company" that the entity resolves to be established. Just doesn't go along with everything I've been taught.

The IRS computers are capable of reading the first two 40 character lines in the account title when they are looking for the correct name. The "rule" that the owner's name comes first in the account title is intended to maximize the chances of a match. It is mission critical in banks that only report the first line of the account title - the correct name has to be there, but it's simply a good idea in other banks.

I don't understand what a "side company" is and hope the attorney did not use that term. If it's a DBA, the entity's real name should still appear first in the account title. (On a related issue, any DBA needs to be registered with the state before you open an account using that name.)

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I have an attorney telling me that I don't have to set the account up as DBA, that the EIN can be used on "side company" that the entity resolves to be established. Just doesn't go along with everything I've been taught.

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"Side companies" make me nervous. What are they doing? It is possible for a non-profit org. to have a for profit business - in that case you need to watch that it is not a NOW account.

Not for profits can have subsidiaries just like for profit corporations. For example, you could have ABC Youth Services, a wholly owned subsidiary of ABC Baptist Church. The only one I've ever set up was in Kansas about 15 years ago but at that time we had to register the subsidiary's name with the IRS and with an agency in Topeka. It wasn't a DBA, it was a registered name on our corporate documents. We had to maintain seperate accounts which were titled accordingly, but we only filed one tax return for both.

Because of variations in State law I would contact an attorney who specializes in not for profits. It was a very complicated process 15 years ago - I'm sure it hasn't gotten any easier. If it isn't set up right you're going to have CIP issues.