When you say a "tax number", you are probably referring to your EIN (Employee Identification Number) obtained from the IRS. This is the business equivelent of a person's social security number. It's simply a taxpayer ID number that's requested from the IRS by filling out a one page form. By itself, this has nothing to do with whether or not you are tax exempt.
You probably also have a taxpayer ID number listed with your state government. At least in Texas, this is a version of the EIN with some extra digits added at the beginning/end. I think that's pretty common. Anyway, your State taxpayer ID would be used when filing sales tax information or other business taxes/fees at the state level.
What concerns me is the statement "for others to use for their tax purposes". Use for what? If your organization isn't set up as a 501(c)(3) with the IRS, donors normally can't claim contributions or donations as a charitable deductions.
If you are interested in becoming a 501(c)(3) non-profit organization, there are quite a few postings here on the Forum. Just go into the Search facility. "501" is a good key word to use. There are also several of us who have completed the process and are usually glad to share info or answer questions. Good luck!
I have a question...I am the new treasurer to the PTO. As far as I know we are not filing and not exempt. I think I will need to look into that one a bit more. I guess the question is...I've used a tax number for others to use for their tax purposes. Is that the same number as that of the exempt?
Standard disclaimer -I'm not an accountant or an attorney - just a parent who's tried to figure it out.
In addition to what Tim stated, let me add some more information. First, you need understand the difference in the levels of government that may affect you.
Sales tax is levied by your state. What many people fail to remember is that the PTO is a type of business - hopefully a not-for-profit one. As such it pays sales tax on things it purchases and may need to collect and remit sales tax to the state for things it sells (T-Shirts). If you are tax exempt with your state, you may get out of paying some of those sales taxes.
The 990 is an informational form that non-profits file with IRS - the federal government. (Like a person files the 1040.) Once organizations are set up as a 501(c)(3) non-proift with the IRS, they are expected to file 990 (or 990EZ) either voluntarily or if they reach a certain income threshold.
Tim is absolutely right in that the fact that your fundraiser's revenues exceeded expenses has nothing to do with you being a non-proift.
A for-profit business hopes to have excess revenues (profits) that are distributed back to its owners in the form of income or dividends. A not-for-profit is organized so that excess funds (profits) are used for its charitable purpose. That is not to say they all have to be expended in the same year. A not-for-profit can have employees, pay salaries, save money in the bank, etc. Whether a particular activity runs at a loss, breakeven, or at profit has nothing to do with it.
What the person may have meant to point out, is that if you aren't officially set up with the IRS as non-profit (501c3), then THEY would consider you a business that should be filing a business return each year. It's a fact that thousands of PTOs and organizations operate "informally", file nothing, and just hope no one notices.
As Tim pointed out, it sounds like you may not be "official", and that's something you should explore.
This Forum is wonderful place to get information and help. Good luck!
Is your group incorporated. Are you a 501(c)(3) nonprofit organization?
I'm guessing no. If no, there are lots of groups like yours that are struggling to get things in order. I bet you'll find lots of help here. More to come.
To start, what you were told by another PTO (can't be a nonprofit, because your fundraiser made a profit) is not correct. Your group certainly *can* be a nonprofit. First question is whether you *are* officially one yet.
This is my second year as treasurer of our PTO. We have been told we must file a 990 form. We have never filed any forms to the IRS because we pay sales tax on everything. We are the only PTO of 4 elementary schools the rest are PTA. I have been told by another local PTO we cannot be tax exempt because we have a profit on some fundraisers. I am as lost as can be and need something in writing to back up our 30 years of not filing any forms. Please help!
