We kept our financials in Excel and provided the basic Balance Sheet and Income/Expense informaiton to the general group. I filed the 990EZ a couple times. I think it took me about 2 hours to "slice and dice" the information the way the IRS wanted it and make everything balance.

If you have to file the 990EZ/990, you need to keep in mind - it's not a full accounting of income like you have on your invidual return to assess how much tax is due. It's an informational return to help the IRS determine kinds of income/expenses, how you are operating, are you functioning appropriately as a charitable organization. So the way things are asked may seem a bit strange until you think about it in terms of the intent.

I found the process for obtaining the 501(c)3 status time consuming and yes there are probably state requirements as well prior to and annually. We are lucky enough to have a parent in our school who is an accountant. A couple times during the year she is inputting our records into QuickBooks. When it comes time to do tax return that information gets carried over to the return in the correct place. She is also completeing the rest of the return including any attachments for us.

Thanks for sharing all this info, it's all very reassuring! I do think we're already doing most of it, but it's helpful to have all these resources handy to know if we need to make any changes.

Aside from the 501(c)3 status, you should also be concerned with:

incorporation as a non-profit (do before 501c3 - won't transfer)
sales tax exemption (and payment of sales tax)

These are both state issues and are separate from the 501(c)(3) process. You'll need to check with your state authority on each for initial and on-going requirements.

There's a lot of good information on the IRS website and in this flyer .

Maintaining your status isn't terribly time intensive if your organization is already operating as a charitable org with good practices, both financial and operational. Most of the IRS rules are the things you are supposed to be doing anyway. It might be worthwhile for your treasurer to fill out a 990EZ whether required to file one or not. It's good to see how the IRS wants you to be able to report income and expenses and may change (slightly) how you keep records.

Below is a SIMPLISTIC list of the key items for consideration. Visit the IRS website for details.

MAINTAIN & PROTECT EXEMPTION – key areas are:
*** Operate according to mission/purpose
*** Avoid personal gain/private benefit
*** Avoid lobbying/political activity (for a candidate)
*** Do not operate trade/business outside of primary purpose
*** No illegal activities
*** Satisfy annual filing requirement

PUBLIC DISCLOSURE – the organization must make available "upon request"
*** Exemption application (Form 1023), including supporting documents and any letter or document issued by the IRS concerning the application
*** Org's annual return (which is usually available online from Guidestar.org)

Note: Must provide within 30 days. May charge reasonable copying and postage charges.

DONATIONS – Substantiation and Disclosure Requirements
*** Provide receipts/documentation for any donations of cash/check/money

*** Specific documentation required for donations of $250 or more

*** Provide disclosure statement for Quid Pro Quo contributions over $75 (i.e., sell tickets for $100 for dinner valued at $20; person can claim $80)

*** May have more filing requirements for “substantial” non cash contributions

REPORTING TO IRS
*** Annual IRS filing each year by the 15th day of the fifth month after the close of organizations fiscal year
990N: < $25,000 (E-Postcard)
990EZ: $25K-$100K
990: >$100K

>>>>> Penalties &#8211; no $$ penalty on 990N, but will get a reminder from IRS
>>>>> Late 990/990EZ is $20 per day penalty
>>>>> Failure to file any of these for 3 years &#8211; automatic loss of exemption

*** Need to report Changes in name, address, operational structure, or dissolution of organization (can include with annual filing)

Definitely 990N or EZ -- or the full 990, if you're over $100k (though I think this number is higher for a year or two as the new 990 is brought in).

I think the treasurer should try filling out a 990EZ to get a feel for what records are needed. Eg, the IRS wants gross receipts, so you have to keep track of income and expenses separately. $4k checks received for gift wrap, $2k paid to vendor -- not just $2k net.

There are probably state filing requirements, also, but I'm in MA so I can't speak to WI.