It took us 3 months from the time we filed to getting our determination. They gave us 5 years from the time of filing.

We had 2 of us working on the documentation, that way one worked on the original information and the other person tightened it up and checked it.

I strongly advise that you follow all the suggestions given by the folks on this website and information given by PTO Today.

On the political stuff it's pretty clear cut:

A 501(c)(30 may not attempt to influence legislation as a SUBSTANTIAL part of its activities and it may not participate at all in campaign activity for or against political candidates.

That's from the IRS. But from an "internal policy" perspective it's a little trickier. No matter how clear cut the issue, do you really believe 100% (or a large majority) of your membership would take the position the Board wants to support? Would it drive a wedge in your membership? Even though it's okay for you to get involved in these activities (not candidates) once in awhile, you have decide if its a good idea.

There's never much of a controversy if you are taking a neutral position (on either candidate or issue). So if you want to invite all the school board candidates to present 5 minutes at a meeting, fine. If you want to SUPPORT one - no, you can't do that. If you want to encourage people to vote, great. If you want them to vote a certain way, it doesn't endanger your 501c3 position, but you need to decide as a group if it's wise for you to get involved in that way.

Ozgirl--How long did it take from the time you sent in the forms to the IRS to the time the IRS confirmed your exemption status?

I wish there was a list of tax exemption "rules" that apply to PTO's. For instance, in some of the literature you reference it says, "...section 501(c)(3) charitable organizations may not intervene in political campaigns or substantial lobbying activities." My question is, does this include contributing funds to a school levy campaign? Our PTO has been asked if we will contribute funds and I have been wavering because I'm not sure how the IRS stands on this point.

As far as income tax (federal/IRS), if you are typical PTO, then you shouldn't have much to worry about. Some non-profits get into very elaborate situations. For instance if a non-profit starts investing in real estate and renting out the property (and it has nothing to do with it's mission), that income might be considered differently that income from a typical fundraiser.

You need to understand some basic principals and a few things about how donors can count what they give to you. For example:

1) someone who donates something to satisfy a private interest/benefit cannot claim the donation as a deduction on their taxes. (i.e. a parent "donates" school supplies to the PTO for his own child)

2) any value received must be subtracted from the donation. (i.e. pay $10 for $3 spaghetti dinner. Charitable contribution is only $7)


What you might want to do is review are some of the documents on the IRS website. I'm not suggesting you read these cover to cover.

Unrelated Business Income
www.irs.gov/charities/article/0,,id=96104,00.html

Publication 598 Tax on Unrelated Business Income
www.irs.gov/pub/irs-pdf/p598.pdf

Publication 525 Charitable Contributions
www.irs.gov/pub/irs-pdf/p526.pdf

Charitable Contributions (Substantiation and Disclosure)- This is a very nice brochure.
www.irs.gov/pub/irs-pdf/p1771.pdf
(intended for the individual taxpayer)

Frequently Asked Questions about Exempt Orgs
www.irs.gov/charities/content/0,,id=96986,00.html
This is a nice site, very clear - easy to see what you might want to read.

We were pretty excited about it taking such a short period of time. However, we did a lot of research and used a lot of information from this wonderful board.

Our letter said that it was important for us to know what things incur tax - ie. sales of merchandise, etc. That not all things were considered a deduction or tax free.

I was just trying to sort through the information we were given.

Thanks