The general rule of thumb is that if a charitable organization makes less than $5000 GROSS per year, it can continue to operate informally.

But if take in more (for the year), the IRS expects you to formalize your organization and apply for status as a 501(c)(3). It's not how much is in your account at any one time or how much is spent/not spent, or left at the end of the year.

It's based on everything coming in (Gross), not what you have left after expenses (Net). You say you collected $18,000 - that one transaction puts you far over the threshold. Additionally, for security and crime reasons, banks are required to watch closely when cash deposits of $10,000 or more are made. When it's a business making a routine deposit or a organization that's set up as non-profit depositing a fundraiser, all is well and good. Otherwise, people may start asking questions.

So if the PTO isn't small enough to stay informal, and it's not a person or a true charitable org - that means it is simply a business and should be filing a commercial return.

Even though your purpose is appropriate, it's past time to evaluate the business processes. Not being set up properly, checks made out to cash or to a primary stakeholders, one person responsible for all funds - those are each red flags.

Either the school should take over the accounting and deposit the money with their funds or the PTO should be set up properly.

Here's another post that goes into more detail.

www.ptotoday.com/boards/robts-rules-byla...ut-501-c-3-more.html

i run the pto by myself because for 3 years there has been little to no interest in it. It has never been a problem because our bank accout (with nonprofit tax id) has never been over 500 dollars. I am just wrapping up a huge fundraiser we have like 18,000 dollars in the account but we have not paid the fr company their 1/2 yet. here is the problem, the bank president and 2 compliance officers of the bank called me in for a meeting today. Aparently we have too much money and are on someones radar now. what ever that means. they are contacting the superintendant of the district to make sure they are associated with the pto. the school, parents and children are being given the choice of what to spend the money on. I held out 1000.00 and cashed a personal check for 750.00. and the bank says that that is one of the factors that there is no cash out of a nonprofit account. I cant find any rules does anyone know anything?