Question: tax exempt and activities fund

very new to this so any help would be appreciated. our school PTO is using the districts tax id # for tax exempt status. however our big fundraisers are paid through not the PTO but through an "activities club" through the district. so basically any money the pto raises, we would use that money , deposit it into the districts account and they would in turn write a check to say Geckler. is this normal ? we as a pto aren't able to hold funds over from year to year either.i'm guessing for tax purposes on the districts part. there are many new parents this year who want to do things right and and become indept. but all we are getting is "why do you want to change something that has been working?" also are we covered liability wise if we hold a function at the school as a pto. they "the district" is saying yes because they hold insurance. whew... so confused... hopefully not too confusing for you. thanks

Asked by Anonymous

Answers:

Community Advice

hiphopmom writes:
OK Well our board is all new this year and we are having a similar situation. We found out by accident that a previous board made our PTO an incorporation to eventually apply for tax exempt. They never filed and also never filed taxes so we are left to fix it. We are going to dissolve the present incorporation and start a new one (school has changed name so it helps) and immediately file for the tax exemption. Then we will go back and take care of any taxes we might need to pay. What I've learned is that legally we are not tax exempt, we have in the past given the school the money we make and then they purchase with their tax exempt number but that means we have large amounts of money passing through 3-4 people, to me that seems like too much room for error. We were told by a lawyer that we should have our own exemption status because legally we should not be going through the school to pay for things. We also have people that don't want to change it but in the future if there is an audit of us or the school it could cause problems. You should also have your own insurance. We are covered for somethings under the schools insurance but not all things. I would look into it, we have insurance. Now we also carry over money, in the past they were carrying over too much but for future we will not be carrying over more than $5,000. It is all very confusing and it's taking us months to fix it but at least we know that while we were in things were done right. (We are incorporated also because it protects the individual members from being sued for things) Let me know if this was helpful

Community Advice

princessstar23 writes:
so one question, being a new PTO did you have to raise funds for the one time fee, and if so were the members that did not want to change against spending the money? that's what we're afraid of, that the members who don't want change will resist.

Community Advice

luresa writes:
sounds like you "new guys" have made some great choices for your future and the future of your school. I am wondering if you have any information regarding any grievances that a parent of facultymember might have and where is the appropriate authority over disputes over procedures, etc..?Thanks