I have to second JHB on this one. There has been lots of talk about situations such as yours on these boards before. If you just call the IRS and ask them to help you fix things, you can probably get some pretty good advice, but you will probably also almost certainly set yourself up for a big bill of fines and penalties. While I've had some good luck in the past getting such fees waived or significantly reduced for some groups, others have not had the same experience.
A good option for you may be to start up a "new" more formalized organization (which would be somewhat transparent to your members), with your tax exemption started off correctly, and let the old organization die off. Then you could at least help ensure that filings are made correctly going forward, while hoping that no one at the IRS ever notices the old structure ever existed. I know that option has been used by at least one other group represented on here, if for no other reason than their old financial records were either missing or undeciperable.
Punky is right that incorporation has nothing to do with the IRS. It's handled at the state level, is optional, and is one of the possible steps in formalizing your organizations.
If you hold a leadership position, yes, you should attempt to lead your organization in an ethical and legal manner. However, it's hardly like the IRS will come knocking at your door in the next few days - if ever. There are tens (if not hundreds) of thousands of organizations just like yours all over the US.
We're not talking about one phone call or filling out a simple form. Doing this "right" involves some time and effort and commitment not just of yourself but of the PTO for years to come.
With your revenues, yes - you should formalize. But you should also know there are choices. One of my PTOs (less funds than yours) knew future officers would likely never keep up with the rules and paperwork. They chose to stay informal, keep their own fundraising to less than $5000 and instead assist with fundraising that went directly to the school.
There have been times, I've been asked to help with groups that had no intention of filing even though they made substantial amounts. So I had to choose not be associated with those groups.
I also helped my elementary group go through most all the steps after a tragic embezzlement that devestated everyone. They currently have good processes and file properly with the state and the IRS.
My advice stands - spend a little time on research, consult with your own group, THEN call the IRS.
Actually, it doesn't matter if you are incorporated or not. Anytime ANY organization makes money you need to file with the IRS, otherwise if they catch wind of it you could be in trouble (think tax evation!) In the state of Minnesota, if your org makes over $5,000 you need to file. I strongly recommend checking with the IRS first. Here is a link www.irs.gov/
and a phone number: 1-800-829-1040.
Robert's Rules of Order addresses rules for meetings, not issues with the IRS. They are two separate areas.
Good luck!
Actually, I'd suggest exploring this site a little, getting some understanding of the issues, and THEN deciding on a course of action. I don't think I'd plunge into an IRS call first thing.
There's a lot written in these two sections:
Robt's Rules, ByLaws, Legal
Day to Day PTO Management
Explore the search feature (top center) with 501 as one of your key words. Then just sit back and read.
You'll also want to review the benefits of joing PTO Today Plus (the paid membership portion of this site).
Yes! You should contact your state IRS agency as soon as possible. Our local elementary school thought it was incorporated but wasn't and was slapped with a fine for not filing with the IRS.
I have recently taken over as President of our unincorporated PTO and am trying to determine our responsibilities to the IRS. We have revenues of over $50,000. Should we be filing with the IRS? Thanks.
