Lucky for us we have a great new treasurer this year! She contacted both the IRS & State Tax board they both wanted 3 years back taxes
(which we did not have) so the new treasurer had to go through records & prepare the tax statements, she has done that & under the advice of a Parent CPA also sent the IRS a letter explaining our situation.
However she discovered several checks that were written last year by the President (now Vice)that were not approved, not properly signed by 2 parties, & had no reciepts. I am upset about this, but for now we are waiting to hear back from the IRS & waiting to get our non-profit status back. Wish us luck!! [img]tongue.gif[/img]
Lu - I agree with you. At the level of income your PTO has, you should be a registered non-profit 501c3 organization. It has nothing to do with whether or not you are "making a profit".
Like so many of us, your principal is simply ignorant. Thanks to this site, and the combined knowledge of so many PTOers, we can all learn the right thing to do - and how to do it. Our PTO would have coasted along in blissful ignorance had it not been for this site. Once I learned about PTO's and 501c3, I felt a moral obligation to complete the registration process (not to mention a legal one when you get right down to it).
There are a ton of posts on this site that you can use to educate your principal and/or members. At minimum, you should tell him that contributions to your PTO are not tax deductible unless you are registered, and your purchases are exempt from state sales tax (paperwork required varies from state to state).
Good luck! By the way, there are several names for the same thing: tax id #, federal tax #, employer id #. They all refer to the federal identifcation # of an entity like PTO, similar to a social security # for a person. I think alot of confusion arises from the term "tax exempt #" because you can get a # from the IRS without ever filing the non-profit paperwork. In fact, getting the number (form SS-4) is the first step.
Hi, our PTO has existed for 20+ yrs. We gross 100K+ and just found out over the summer that we were not non-profit. Just like you. We have been audited by parent CPA., & never alerted to this. We opted to go with an independent CPA firm. Submitted application for Non Profit, form 1023 and are filing IRS 990 for the first time. We're trying to do things right. Get professional advice. I can send you a copy of our application. It' s intimidating but not hard to do. The treasurer may want to do it. We are also using Quick Books. It's going to be ok. We're also getting bonded, D&O insurance and Liability.
Critter,
I'm in a similar situation however found out that we have a federal ID#(??)instead of a tax exempt# and we were never registered with the IRS. I am a new president coming in and am very concerned as well. I spoke iwth the Principal who stated he didn't see a problem with it. (he is checking into it however). We have never filed tax forms. The past president saw to it that we have $10,000 into a CD, $13,000 in a savings and at least $8,000 in the checking.
My question, should we have filed a tax form? Should we register as a non-profit org? The principal didn't seem to worried about it when I confronted him with the idea that we should have as he states "we are not making a profit off from it". However, I feel we are, as there is interest accumulating on it. What should I do?
Critter thanks for the advice. We did have a nonprofit tax ID # that we used on donation reciept etc... When the new treasurer called to check on the status they said in 1995 they contacted us, got no responce so discontinued the #. Maybe because no one was using it. I am pretty sure that if you make over $5000 a year (we do) and do not have a valid tax ID # you must pay taxes on it like it is income. The people who ran the group before us kept. no records. All I know for sure is that the # we have been using & giving people is not valid & that last year no taxes were filed!!! Any advice is helpful!!! THANKS [img]tongue.gif[/img]
I'm curious why you would have lost your tax id number. Sounds like you have been filing a tax return with the IRS, but maybe the key step that had been overlooked was the actual preparation and approval of Form 1023, the application for non-profit status. I was once told by the IRS that if you have no activity against your tax id number for "a long time", that the number may be deactivated. Maybe that's what happened to you. What type of paperwork was filed each year?
If I were in your sitaution, I would ask the IRS (1-877-829-5500)for advice regarding contacting the affected parties. Your PTO acted in good faith, and while ignorance is no excuse for the law, it would seem that if your PTO begins the 501c3 application process soon, you could move forward, not stress over the past. There are probably hundreds of PTO's in this country who operate under the same misconception as yours (tax id # = tax exempt), and so far as I know, not one of them has complained on this forum of having been audited and/or fined by the IRS. I'd like to know what advice the IRS gives you - keep us posted.
Talk in detail to the IRS before you contact an accountant. The IRS reps are the experts in non-profit law - a generalist accountant might not be experienced in these specific issues. Plus, the IRS advice is free.
