The IRS toll free number for the non-profit section is 1(877)829-5500. I have bothered these people so many times and each time they were so kind and helpful. Give them a call and ask these questions I am sure you will be able to find someone there to help you. Good Luck.
We are currently in the process of planning our budget for next year which includes planning our fundraising activities.
As the treasurer I find myself looking through our information for tax reasons.
We were a PTA at one point in time but disolved that organization and became a PTO. I was not here at the time but I believe part of the reasons for changing included fundraising.
I do have a 1993 PTA Money Matters which seems to have some useful information.
In looking through IRS Publication 557 (Revised May of 97- I haven't yet looked to see if there is a newer version), I became concerned about out tax exempt status. We were granted this status with the 5 year provision period. Of course the 5 years just ended so I have to file our 8734.
The point is, I want to be sure we have filled out our 990's right and that I get the 8734 correct.
Unrelated business income is what scares me. We now have interest income which is of coures unrelated; that isn't the problem.
We have always considered all fundraisers related to our goal since all our funds are returned to the students in some fashion. Sometimes this is programs and sometimes we buy things the school needs but the state won't pay for.
I found a line in the PTA money matters that said the sole need for the money doesn't make it a related activity and that most income should come from dues and activies that are for the betterment of the students like carnivals.
That would suggest that car washes and golf tournaments are unrelated. Has anyone found an IRS code that would clearly define this for me? I can't believe these type of activies would fall into Unrelated Business Income, I would just like an IRS code or something so that I know we are doing this right.
If this were considered unrelated income, this type of activity would need to be limited by the related activities in order to preserve the 501 (c) status.
From what I have researched so far, this appears to be a "grey area" in tax code.
