If our previous informally operating PTO is incorporating and thus starting new (clean slate approach), do I need to call the IRS to "cancel" our old EIN on the previously used bank account, or do I just close the accounts? Thanks!
Thanks for all your answers. I do know the Tax ID number and had previously checked on the status. IRS didn't say anything about deactivated just that it wasn't a listed as a 501(c)(3).
Transferring the money wouldn't bug me if it wasn't such a large number. But, I'll go ahead. I like the comparison to the person who was speeding.
In my area, the IRS has been coming after **existing** 501(c)(3)s for improper filings. Just makes me nervous.
By the way, I work in government (not IRS) with wonderful, ethical, dedicated people. But there are often situations where enforcing the letter of the law is impractical. For instance, do you think the police would really welcome everyone showing up at the station with the attitude, "I was speeding the other day, and I broke the law. After thinking about it, I've decided the only fair thing to do is turn myself in."
Frankly, there are lots of situations where the enforcement officers just don't want to know, although they can't say that. If there was no harmful intent, no harm done, what is the point?
If your PTO owes taxes now because of missed filings, those fines will probably be forgiven - eventually. But that's after you and the IRS each expend time and effort resolving it. Had the PTO been reporting properly, no taxes would have been due. So the government isn't deprived of any revenue. Again, what's the point?
Critter - not to make it more confusing, but I think y'all actually meant the 990/990EZ which is the annual filing (like a person does a 1040). The 1023 is the initial one-time application.
A qualified 501(c)(3) files an annual informational return if their income averages more than $25,000 per year using a 990 or 990EZ. If you make less, you can file voluntarily or not at all - your choice. The problem is, if the IRS doesn't hear from you after a few years, at some point they may assume you are inactive. So it's good to file voluntarily just to keep the organization alive.
But there's a new requirement phasing in where 501(c)(3)s that don't need a 990/990EZ file a short-short version nicknamed the "e-postcard".
So now everyone files something and organizations shouldn't fall through the cracks.
But back to the orginal question - I doubt this is Quadangels' situation. Many of us were erroneously told that the PTOs were charitable organizations/501(c)(3). But very few people really understand what that entails. They were probably told the same thing. The group is set up to do "good stuff". No one profits. I'm sure it was believed with the best of intentions.
I agree with the others. Clean slate. Move on. Start your new PTO and move forward.
In this case, it sounds like there might not even be a tax id number for the old PTO. Do you know what number was used to set up your old PTO's bank account? Even if there is a tax id for your old PTO, you don't have to do anything to deactivate or terminate it. Just stop using it and the old group basically goes away.
Just for clarification, I think OneAndOnly meant "1023", not "1099". Form 1023 is the application for 501c3. 1099 is the form used to report income paid to contractors. This alphabet soup is confusing!
The old PTO may not have filed their 1099 and the IRS may have de-activated the Tax ID number. That's what happened to my old school. Until I called for a Letter of Determination, we had no idea that they did it. So we had to re activiate it and file for 501c3.
Call and first ask if the old PTO is listed as an active or deactivate organization. If its deactivated, you are good to just move the money and terminate the old numbers.
