momto2grits;135623 wrote: I was told by our state pta office that the pta should never hold money for groups such as music or the media center, etc. They said that was funneling money. How do I explain this to people I'm discussing this with. We do hold the music fundraiser money ( which we don't have a part in) as well as the media centers bookfair money. Maybe I don't really understand exactly why we shouldn't do this to begin with. Can anyone help me get a better handle on this subject? She did say that it would give the IRS the impression that we collected more money than we actually did. Thanks for the help.
You've basically hit on it, grits. It's not a best practice.
Does it happen? Yes. Are you likely to be in deep hot water? No (especially if the dollars you hold for others are raised well and used well). Are you "laundering money" (making money collected with illegal activity appear clean)? Not even close. Give me a break.
It's really up to your group if you want to do that or not. You're every bit within your rights (and I'd recommend) not doing it. It's just cleaner.
If the other groups want to operate real informally, that's fine. But they should just get an EIN from feds, open their own account and then -- if they want to be "below the radar" (as they seem to) -- they wouldn't be the first group like that not to file any reports.
It is true that your PTO's (or PTA's) filing requirements are based on gross dollars in, so the extra moeny on your books could result in you guys having more filing responsibilities.
Hope that helps,
Tim
