Hi everyone. Just wanted to let you know what's going on...after phone calls, emails and then a certified letter, we received a box of docs which I promptly took to our accounting firm.
They are sorting through it all and we won't know for a couple weeks where we stand.
Our group's budget is around $150K per year.
Penalties is a HUGE concern.
For right now, we have to wait and see what the accountants find - if anything. We have no idea what the deal was with the previous treas.
I am absolutely appalled by PTOer's post to this list. Here we are, leaders of an organization that is entrusted with money that is supposed to be for the children, and it's ok to cheat? Needless to say, I would not want to be a part of an organization where PTOer is involved. Where does the line start to blur? Where do the rewards become greater than the "risks"? Do you start taking a few bucks from the treasury without receipts because you're sure the risk of getting caught is so small?
If your organization takes in over $25,000 and is registered with the IRS then you must file. It's not that big of deal - the form is not that difficult. And they may not catch up to you this year or the next, but why take the chance when the money is not truly yours, but belongs to the kids at the school.
Jen - are you absolutely sure your PTO is a 501(c)(3) organization? Who told you that you are delinquent on the filings? Have you received something from the IRS?
Maybe, just maybe the situation isn't as worrisome as you might think. If your PTO has not yet filed for 501(c)(3) status, then the IRS doesn't even know you exist.
<PTOer>--Yeah, I would. Much better to clean things up now to the extent possible and take steps to prevent this problem from occurring again than to knowingly fail to file. (My experience with the penalty people is a little different from JHB's, too--though I certainly wouldn't say it's easy, I've seen them waive or significantly reduce penalties a number of times.)
Yes, random audits are virtually nonexistent. But here's a scenario for you. One the blog, Tim has a story about a PTA in PA who is refusing to give the local Board of Ed it's financial info. While I don't know what exactly the BOE is looking for, let's say the PTA is refusing to even give them a copy of the 990 it filed. Not Good. As a 501(c)(3), the PTA is required to give out that info. So the BOE could go to the IRS and say, hey, they're not giving us this 990 info. Those calls *are* ones that the IRS follows up on--there are separate penalties for failure to provide timely such information.
So if Jenizme's group can't fulfill a similar request, what are they going to tell the IRS? Yes, we know we were supposed to file, but we didn't think you'd ever notice, so we didn't bother???!!
Also, once the group does start filing again, depending on how the numbers turn out, it is very possible that the IRS will then notice that returns are missing, and ask where they are at that time.
Again, all this assumes Jenizme's group was taking in enough money to have a filing requirement....
Life is all about risks some more likely than others. (You might be swept away by a tornado any moment. Not likely - but possible.)
If you haven't filed with the IRS, they assume you made less than 25,000 that year, unless someone tells them differently. Random audits on organizations like PTOs are very, very few.
Considering that, are you really going to call and TELL them you should have filed, but someone forgot??
We were in this situation last year. Our taxes didn't get filed for the previous three years and to make it worse, one of the treasurers (for the first two of those years) claimed he "lost" all the files. We had to go back and recreate our records using bank statements.
We did receive penalty notices and the fines were huge. We were looking at almost $20,000 in penalties. We wrote letters of explanations and had our Congressman's office get involved and help out. The penalties were waived.
I was not involved in our group while these two people were treasurers, but I cannot believe that they didn't know or care that they had to file. It's part of their job description in our bylaws. We were ready to file a lawsuit and sue them if we had to pay - it was their negligence. We also felt that the Presidents of those years were also negligent - they should have reminded the treasurer and kept on it until it was done.
