Like you, the school has no access to our money. But we found out that the bank account had been set up using the school's tax id number a way long time ago. Fixed that in a hurry!

Hang in there with the new regime. You are doing the right thing. No one should be surprised that a 10-year treasurer would quit when some new folks shake things up a bit. He felt you didnt' trust him, but one of my favorite words of wisdom about treasuring is, "TRUST IS NOT A SAFEGUARD". Keep that in mind when you're challenged.

Thanks for the replies. We're now in the process of trying to figure out what ID # the bank got when the account was opened. I know for sure that the school has no access to our financial records...they only see the general budget reports we make at monthly meetings, but don't have any other access, nor do we provide the school with any formal reporting.

The new executive group (with some exceptions) has tried very hard to bring more structure to our group, but have met with a lot of resistance. We want to incorporate, get 501(c)(3) status and file annually. We have significant revenues, and yet our attempts to even put into place the most basic of controls, like opening the financial side, have been resisted. Our prior Treasurer held the position for nearly ten years, and bank statements and records were seen by no one else. When we sought to begin enhancing controls this year with a co-Treasurer, he quit.

We'll see what happens, but in our view, we can't raise this much money and pretend we're just a little cigar box, small time entity without responsibilities to our members/contributors. And we think that we almost certainly need to file.

Your 5th accountant was being nice. Even IF your PTO was operating under the wing of the school, I suspect the school doesn't know about your $$ (as far as its own tax reporting goes). Anyway, you indicate your PTO is separate from the school. First of all, don't panic. They're right, you shouldn't remain unknown to the IRS, but the IRS police are not out looking for you.

Like Pals said, the first "test" is whether your PTO is banking all this money under its own tax id number or the school's (or God forbid, someone's personal social security number). That's important to know. Call the bank and find out what identification number was used to set up the account. If your $$ is under the school's number, you are technically raising $ for the school and the 5th accountant is maybe correct. If the $$ is under your own #, then the other 4 are right, but you need more than a quick reply about needing to file forms. If the $$ is under a ss#, then you need to get your own PTO's tax id number from the IRS, open a new small business account with that number, and transfer the $$ to the new account.

I should clarify that I am not an accountant. But I know there are specialist accountants who work primarily with non-profit groups, and there are lots of other accountants who don't. A quick answer from a non-specialist won't help you much. Lots of PTOs have evolved from exactly your position (loads of $, not incorporated, not 501c3) to be formally established as a federally-registered non-profit corporation. It's not rocket-science but it does require your group to make some important commitments:

1. You must accept that once you are incorporated and 501c3 that your group will forever properly file the annual paperwork required by your state and the IRS. Heavy fines if that is ignored.
2. You must accept that the process to initially file for 501c3 is fairly tedious, and will cost your group $500 in filing fees. You don't need to hire anyone to do it for you, but you need to find a volunteer who is comfortable digging through the application and completing the process.

Typically, the first step is to incorporate in your state. That's easy and usually cheap (less than $50). Then you file for 501c3 with the IRS using form 1023. The good news is that the IRS views your creation date as the date you incorporated so you can fill out the application from the viewpoint of a brand new org and not have to dig up your financial history. It's still a lengthy application, but that makes it a bit easier.

Yes, with $$ like yours, you should formalize your group. Take time to read through other posts on this site, contact the IRS with your questions, and maybe you can find a 6th pro bono accountant who has in depth experience with 501c3 registration. I also suggest you purchase the Getting Started guide from this site - it includes detailed instructions for filing out the paperwork from the eyes of a PTO.

Are you a seperate entity of your school? If you have your own id number you should be, are you 501c? Your revenues are very high and you should be filing forms if you aren't part of your school, as far as if you work under your school I am not sure how that works. Anyone?

Our PTO is neither incorporated nor does it have 501(c)(3) status. Our annual revenues are north of $40,000. Our prior, long-time treasurer never filed anything with the IRS. We've run this by four accountants up until today, and all four said that we had filing obligations...you can't just raise and spend that kind of money and remain "unknown" at the IRS. Today, however, a fifth accountant said that we don't have to due to being an "affiliate" of a governmental organization (a school). However, we are not in any way linked to our school...it doesn't control us, how we raise our money, how we spend our money, etc.

So...do we have to make IRS filings or not?

Thanks