is your PTO organizationally mature to fulfill the annual filing requirements, especially after you've moved on?
Ahhh...that is the question of the day. I know what I can/will do, but what somebody else will do is a whole other issue. We had applied for a state tax ID# back in '83, and apparently the group the following year decided not to file the returns to keep it valid. The only reason that I found this out was when I tried to use the number and was told that it was no good, and hadn't been for quite some time. :eek: So...I reapplied, got a new number, and will file the appropriate paperwork at year end.
As for the the 501c3, I guess the best thing to do right now is let it ride as nobody else seems to be in a rush to change the status quo. I just get paniky when I think about those three letters...I R S!
Melissa, thanks for the clarification. It's not necessarily a slam dunk that your group should file for 501c3. There are issues to consider. Most importantly, is your PTO organizationally mature to fulfill the annual filing requirements, especially after you've moved on? (this is no way an indictment of the people in your group, more a comment on the infrastructure and corporate culture). Once a 501c3, your PTO will need to file the 990/990EZ every year from now on.
For years and years, independent parent groups have done their good work without ever knowing they were viewed as charities in the IRS's eyes. I credit PTOToday with bringing us all the knowledge that maybe, just maybe, our PTOs should formalize as a 501c3. There are lots of PTOs that have earned their 501c3, and probably more that have never applied. I doubt the IRS is sending out the posse to entrap those non-filers.
Regarding completing the 1023 application. Lots of PTO's have successfully complete the form themselves, without professional assistance other than phone calls to the IRS help line. The PTOToday Start Up guide ($40) takes you through the application basically line by line. Maybe you could get the funding to buy the guide and then decide if you have the expertise to complete the application yourself (be assured you do!). If the application itself were demystified, maybe the whole process including the $500 fee would seem less ominous.
We are an independent group...own bank account, state tax ID#, etc. When I brought up filing for 501(c)3, the board was less than enthusiastic about paying the $500 filing fee. Not to mention that we were unable to find a professional to donate time to help us file, thereby making it an even more expensive chore. I don't mind doing the subsequent filing, I just don't want to tackle the initial one.
My biggest fear is that the IRS will somehow take notice of us and "get" us on all of the years that no filings have been made. Irrational...I don't know. I just know that I really want to avoid any unpleasant situation if at all possible.
I said a public school is 501c3. That doesn't necessarily mean that a school's PTO is 501c3. (note: I'm just a mom who's done some research. I'm not an accountant, nor do
I work for the IRS. What I'm about to say is my interpretation of the rules, but still only my opinion.)
Many (most?) PTOs view themselves and operate as independent organizations from the school. They have their own tax id number and their own bank account(s), their own bylaws, and their duly elected officers. They work closely with their school, but manage their finances independently. These PTOs are the ones who should consider applying to become a federally-recognized tax exempt charity-- 501c3.
Other PTOs (and this I think is the minority) are set up like a committee of the school. Their money is held in a school bank account. They use the school's tax id number. They may even need to requisition funds through the school's business department. Even though they may operate independently in other ways (such as having open elections, bylaws, events, etc.), their finances are under the school's management. These groups would not seek 501c3 because they are not financially independent.
For the non-independent PTO, there's nothing to file with the IRS. Presumeably, the school's own tax return would consider the money held on the PTO's behalf since it's in the school's bank account. That PTO would not file for 501c3, nor would they file a 990/990EZ. The IRS doesn't care that you exist (so to speak).
If your PTO is actually operating like an independent organization (especially when it comes to finances), then you may want to file for your 501c3. If you recieve the 501c3 designation from the IRS, then you need to file the annual Form 990/990EZ every year from then on.
Now I think there is a situation where the IRS automatically views a non-profit group as 501c3, if your annual gross receipts is very low. I think maybe in that case you could file an annual 990EZ without having previously filed the 1023, but that would be an unusual situation. And once you file a 990/990EZ, your group has a history with the IRS and you'll need to file every year from now on (i.e. they know you exist).
So...which scenario describes your group?
Don't despair. Hang out here long enough and the spinning stops! Promise.
You seem to be the guru of 501(c)3, so I am addressing this to you. However, if anyone else knows the answers, please feel free to jump in. [img]smile.gif[/img]
Here is the situation that I find our PTO in. We are a public school, and the PTO has been in existence since 1978. To my knowledge, no forms (state or federal) have ever been filed. I know enough from working in trust tax many years ago that the IRS isn't a group that you want to go rounds with. As treasurer, I want any and all transactinon with my name attached to them to be within the tax laws, ya know?!
You stated:
Public schools are automatically 501c3.
Am I to assume (hate that word ) that all we need to do is file a 990 and we are good to go? No need to file a 1023?
I feel as if my head is spinning by trying to do the right thing. :eek:
