If you have an EIN, then at some point the IRS did know you exist, because they're the ones that issued it. They don't know that you should file, because you might have dissolved, or you might not be over the $5k threshold.

Our PTO had an EIN that the IRS didn't actually have a record of having issued; this was on our bank account. The IRS did, however, have a record of issuing a new EIN to our group, which never made it to the bank.

When I finally got through the 501c3 process and filed the 3 years of 990EZs, we got a notice that we owed some $11k in late fees. However, perhaps in some part due to the fact that we got "legal" on our own initiative, we were able to get the fine waived.

In our case, we were able to get our tax-exempt status retroactively to the date of incorporation, some 20 years earlier. Maybe your past officers were just prescient!

Great feedback thanks! What we are suffering from is a whole new set of officers not only feeling overwhelmed of initially taking office but also this situation and faced with an expense of upwards of $1,000 to complete the entire process. We are having difficulty making a decision to "stay as is" or "start a new". It all started with past officers giving out our EIN number to donors telling them that their donations were tax-exempt. not so. We also had some officers giving out our NYS sales tax exempt number to donors, innocently not knowing the difference. (NYS has granted us sales tax exemption without requiring 501(c)(3) status b/c we qualify as educational purposes).

And yes, this site has been a wonderful resource. We have a Plus membership. (I posted anonymously in case 'big brother' was watching

But to file an annual informational return (990, 990EZ, probably the 990N), first you must be recognized as a tax exempt charitable organization (i.e. 501c3) with the IRS. Until then your organization is simply a business that has failed to file.

Many of us in your situation have discussed how to move forward. Do you go to the IRS and "confess" and try to rectify? Or do you start with a clean slate and simply move forward as a new organization?

Many (most?) of us found it more practical to start from scratch. We didn't have approrpriate records from the past, we weren't the people in charge in past years, nor did many of us have the inclination to unsnarl the IRS red tape. So it's not uncommon to draw a line in the sand and proclaim a new organization from that point forward. As the new organization, you get an EIN, incorporate (optional, but usually beneficial), file an application for 501c3 status, and - if needed - file an application with your state for sales tax exemption.

Hi Confused-

Sounds like you got some great info from JHB. I asked someone here who has a lot of experience with 501c3 and here is what she said:

A group is required to report annually on its finances and basic operations. This is true whether it is incorporated or not and whether or not it is officially certified by the IRS as non-profit under section 501©(3) of the federal tax code. Some people simply call Form 990 a “tax return”. It does go to the IRS, but typically there are no taxes due. That said, there are exceptions to every common situation. First you need to determine whether your group must file Form 990 or From 990 EZ.

The following articles may be helpful to you.

www.ptotoday.com/pto-today-articles/arti...-your-pto-tax-return

www.ptotoday.com/pto-today-articles/article/394-501c3-for-ptos

~Lisa


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The IRS doesn't know you exist, so the gamble is that they eventually discover you.

Frankly, it's probably relatively low risk you'll get caught, but every day data is becoming more and more interconnected. For instance large cash deposits (over $10K, I think) can trigger alerts due to possible money laundering. But since the Patriot Act, even more scrutiny is in place on bank accounts for the possible funding of terrorists. State and Federal sources of information are getting more interconnected each day. Eventually, the fact that you file state sales tax, apply for a bingo license, or some other local action will trigger a match making sure you exist in the IRS database. We're not there yet, but it's getting close. And, of course, there's always the fact someone could simply turn you in.

But all this is not terribly likely. The bigger driver should be that your group wants to model appropriate and LEGAL actions. As far as the IRS is concerned, if your group is bringing in more than $5000 per year, you are supposed to formalize and file an application with the IRS to become a 501(c)(3) org. Doesn't matter where it comes from, if it's someone else's yearbook funds.

Membership in PTO Today is a great way to get started. Lots of guides and resources. This Forum is a great free resource. Many of us have been where you are now.

Filing for 501(c)(3) status is not a trivial undertaking. It requires some patience and attention to detail. But many of us "mere mortals" have done it without hiring a CPA or other professional.

There was supposed to be an online application with a smaller fee introduced this year by the IRS. But it's been delayed.

Feel free to ask questions and search through the forums. "501" is a good key word.

I'm a new Treasurer. My PTO is NOT incorporated and does NOT have 501(c)(3) status. It DOES have an EIN and is exempt from paying NYS sales tax on purchases. Our gross receipts are usually over $25,000 (but that's because we have been acting as a pass-through for yearbook money which we have to re-evaluate doing).

What are our obligations in regards to paying federal taxes which I do not believe we have been doing. I have not found any 990-EZ or similar form in the papers handed down to me. And no current member seems to know.

Is it a 'gamble' situation that it we get audited we could owe federal taxes? Shouldn't the IRS have been sending tax forms as a prompt to file?

Thanks.