CPA REQUIREMENTS CHECKLIST

What We Need Professional Help With

Liana Banyan Corporation Created: December 1, 2025 Priority: HIGH — Blocks Beta Launch

IMMEDIATE NEEDS (Before Beta)

1. Rally Group / Liana Banyan Foundation (501c3)

Entity: Rally Group Status: Filed 2011, Operating since 1984 Current Issue: Unknown — may be administratively dissolved for non-filing Board: Jonathan Jones + Godfather DBA Needed: “Liana Banyan Foundation”

CPA Tasks:

• Determine current status with Secretary of State
• Identify what’s required to reinstate (if dissolved)
• File missing quarterly/annual reports
• Register DBA “Liana Banyan Foundation”
• Confirm 501c3 status is active with IRS
• Set up ongoing compliance calendar

Why It Matters: Required for charitable Joule purchases (tax write-offs)

2. K-1 Reporting Structure

What: Pass-through tax reporting for LLC investors When Needed: Before any project accepts investment

CPA Tasks:

• Design K-1 distribution structure
• Create template for project LLCs
• Set up accounting system to track:
  • Capital contributions
  • Profit/loss allocation
  • Distributions
• Determine reporting frequency (annual minimum)
• Create investor onboarding tax documentation

Why It Matters: Investors need K-1s for their taxes. No K-1 structure = no investment acceptance.

3. Tax Letter Templates (Charitable Donations)

What: Letters confirming charitable donation for tax purposes When Needed: Before accepting charitable Joule purchases

CPA Tasks:

• Create 501c3 donation acknowledgment letter template
• Ensure compliance with IRS requirements
• Set up tracking system for donations
• Determine what qualifies as “charitable” vs. “investment”

Sample Letter Elements:

• Donor name and address
• Date of contribution
• Amount contributed
• Statement that no goods/services were provided (or fair market value if they were)
• 501c3 EIN number
• Signature of authorized officer

4. Three-Currency Tax Treatment

What: How Credits, Marks, and Joules are treated for tax purposes When Needed: Before public launch

CPA Tasks:

• Determine tax classification of each currency:
  • Credits: Likely prepaid platform credits (not taxable until used?)
  • Marks: Effort-debt (tax implications of clearing?)
  • Joules: Stored value (taxable when converted?)
• Document treatment for users
• Document treatment for platform (revenue recognition)
• Create disclosure language for terms of service

MEDIUM-TERM NEEDS (Before Scale)

5. LLC Formation Process

What: Standardized process for project LLC creation Note: Jonathan can file LLCs himself

CPA Tasks:

• Review LLC operating agreement template
• Ensure tax elections are optimal (pass-through vs. other)
• Set up accounting structure for multi-LLC environment
• Determine intercompany transaction treatment

6. Investment Tier Compliance

What: Ensure tiered investment structure is legally sound Tiers: Dolphin ($1K-$5K), Orca ($5K-$50K), Whale ($50K-$500K), Leviathan ($500K+)

CPA Tasks:

• Review for securities law implications (may need securities attorney)
• Confirm accredited investor requirements (if any)
• Document investment agreements for tax treatment
• Ensure Credit match is properly characterized

7. Platform Revenue Recognition

What: When does platform recognize revenue? Complexity: Three currencies + medallions + memberships + marketplace

CPA Tasks:

• Credit purchases: Revenue when purchased or when spent?
• Medallion sales: Revenue when sold or over time?
• Membership fees: Recognize over membership period?
• Marketplace transactions: Platform margin recognition timing
• Create GAAP-compliant accounting policies

LONG-TERM NEEDS (Mature Platform)

8. International Tax Considerations

What: Users from multiple countries, currency differential When: When international user base is significant

CPA Tasks:

• VAT/GST implications by jurisdiction
• Withholding requirements for international payouts
• Transfer pricing if international entities created
• Currency conversion for tax reporting

9. Audit Preparation

What: Financial statements that could withstand audit When: Before significant external investment or acquisition discussions

CPA Tasks:

• Clean books and records
• Documented accounting policies
• Internal controls documentation
• Historical financial statements prepared

CPA SELECTION CRITERIA

Must Have:

• Experience with 501c3 nonprofits
• Experience with LLC pass-through taxation
• Experience with K-1 preparation
• Familiarity with platform/marketplace businesses
• Responsive communication

Nice to Have:

• Experience with cryptocurrency/digital currency (for three-currency questions)
• Experience with crowdfunding platforms
• Experience with international taxation
• Experience with securities compliance

BUDGET ESTIMATE

Initial Setup Budget: $4,000 - $11,000 Ongoing Annual: $8,000 - $23,000

INTERVIEW QUESTIONS FOR CPA

1. Have you worked with 501c3 nonprofits? Can you help us reinstate one?
2. Do you have experience setting up K-1 structures for LLC investors?
3. Are you familiar with platform businesses that use internal currencies?
4. How do you handle revenue recognition for prepaid credits?
5. What’s your turnaround time for K-1 preparation?
6. Can you help us create tax documentation templates?
7. What’s your fee structure? (Hourly vs. project vs. retainer)
8. Are you available for quick questions as they arise?

ACTION ITEMS

Jonathan:

• Research local CPAs with nonprofit + LLC experience
• Get 2-3 quotes
• Schedule initial consultations
• Prioritize Rally Group status check

CPA (Once Hired):

• Rally Group status determination (Week 1)
• Reinstatement filing (Week 1-2)
• K-1 structure recommendation (Week 2-3)
• Tax letter template (Week 2-3)
• Currency tax treatment memo (Week 3-4)

TIMELINE

Checklist Created: December 1, 2025 Priority: HIGH FOR THE KEEP ⚔️