PTO Today

Oh boy, what a mess [img]smile.gif[/img] I became PTO President at the middle school last year. The school was in the mist of changing locations and names. Now that they have a new name the bank wants us to have a new tax ID number. My question how do we get one ? Do we have to join a group like PTA. It turns out that the school calls itself a PTO but, doesn't belong to any organization. The tax number we have been using turns out to be the districts.

Yikes,
Any and all infot would be greatly appreciated, we have checks made out to the new name school that the bank won't take. We really need to resolve this.

Just happened to me. Just opened our new bank account and found out the same issue. We are not registered with the IRS. I found out it cost 350.00 per year and that does not seem worth it to us. Our PTO only brings in 12-15k.
Our exempt number is the cities and they have no problem with us using it. I hear the money can be controlled if they wanted by the city. They can't be bothered. Why reinvent the wheel. I met with other PTO prez and they all agree to keep it the way it is. Our bank was ok with the number I gave them. Why open a can of worms?
Good luck.

$350 per year for what, Lisa? Don't think that's accurate.

Tim

I responded in detail to lisa's posting under another thread. The IRS would like a group of your size to formalize as a 501c3 since you're bringing in more than $5,000 a year. That's the IRS threshold for applying.

Don't assume your city can't be bothered. Economic times are tight in most areas. If there are bank accounts in town under their tax id number (the PTO accounts), that money must be reported on the city's tax returns. It's definately their money even if it feels like yours.

barefootnana - first, don't panic. Getting a tax id number for your new group is easy, free, and can be done in about an hour. Go to www.irs.gov and download Form SS-4. Fill it out and call the IRS as the instructions advise. They'll ask for info from the form and give you the tax id # over the phone. It's that easy. The tax id # is just the identification number for your new PTO. It doesn't mean you're tax exempt or incorporated, just that your PTO exists as an organization. With your own tax id #, you can open a bank account for the PTO.

Critter, thanks for that info. Do you also know how to get an excempt number ? We are non profit . Some busineses will only donate if you are 501c I think it is.

Thanks

First of all, the tax id number is the only number the federal govt (IRS) will issue. Getting one doesn't really mean anything about the non-profit or tax-exempt status of your group -- just that you exist.

You really bring up two different points: the difference between non-profit and tax-exempt. (I am not an attorney, nor an IRS rep so take this with a grain of salt). The first step to formlizing a PTO is to get the tax id number (also called the Employer id number or EIN). Then, typically, the gruop will incorporate in its own state as a NON-PROFIT organization. That MIGHT give your group some special privileges in your state, but the laws vary from state to state. The next step is to file for the official federal EXEMPTION FROM FEDERAL INCOME TAX under section 501c3 of the tax code. In other words, to file for your 501c3. This status allows your group to avoid paying federal income tax on (some/all) of your income. In our state, 501c3 status also exempts our group from paying state sales tax on (most) purchases. In our state, there is no other identification number than the federal tax id number. We don't get a "non-profit" number or an "exemption number".

When you say your group is non-profit, do you mean in spirit or in actual legal status in your state? I think most typical PTOs operate like non-profit organizations, but many many haven't filed with their state or feds.

Yes, you're right about the restriction on donations from outside sources. In order for them to claim their donation to you as tax-deductible, you must be a federally-registered 501c3. Having a tax id number doesn't prove you're 501c3. Some vendors might look the other way and make a donation anyway, but unless you are 501c3, you can't claim to your potential donors that their donations might be tax-deductible. This can be very important if your PTO is planning a big auction or doing a walk-a-thon where you really rely on donations.

Hope this helps. Please come back with more questions, but you might want to order a copy of the PTO Today Start Up guide (from this site) which covers all this stuff in one big binder - written in a way we all can understand, promise.

There is another status your group can obtain. That is a 527 non-profit corporation. this allows you to obtain and use less than 25K/year and have non-profit status as well as cut down on the paperwork required for a 501c3.

A 527 corporations intended status can be used for engaging in public advocacy to promote the education and protection of children.

It is what our education advocacy organization is set up as.

[ 10-06-2006, 02:39 PM: Message edited by: Grant1 ]

Grant - you made me curious so I went to the IRS website for more information about Section 527 organizations. Here's a quote from a couple of publications on www.irs.gov: "The purpose of section 527 groups is to engage in political activities...A political organization subject to 527 is a party, committee, association, fund, or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function. The exempt function of a political organization is influencing or attempting to influence the selection, nomination, election or appointment of an individual to a federal, state, or local public office or office in a political organization."

That might be what your group does, but it doesn't sound like the typical PTO to me.

How do you go about getting the tax id # for your child's school or for the after school program which should fall under child care?