Eligible for NOW Account?

Good Afternoon,

I'm doing a NOW account review and came across a business account, earning interest, that used to be a corporation, (filed with the state as "for profit"), but the filing is inactive and has been revoked for tax delinquency. It became inactive in 2004. The tax ID number, for this business, is the tax ID of the owner, (on our system). Do I have a sole proprietor here? Or a for profit corporation?

Thanks for your help,

Deb

You need to ask your customer how they are currently organized.

Thanks Brenda. I have and they are telling me SP. So, between what they've told me and the expired filing, I would think I can safely assume they are eligible. (?) I live a pretty sheltered life and have never seen anyone change back.

Deb

If your jurisdiction requires an SP to obtain an assumed business name, I would ask for a copy of the proper filing document. Also, your official bank records should reflect Joe Jones, dba XYZ Business. Also, if the business name includes XYZ Business, Inc. - most jurisdictions do not allow the "Inc." for a SP.

You are probably fine since you found no evidence to the contrary. If you feel you need to you can verify by requesting a copy of his tax return (Schedule C on personal tax return).

If he has employees, he will still have an EIN for payroll tax purposes.