PTO Today

We're a newly re-organized PTO. Actually we call ourselves a PTC (Parent Teacher Cooperative). This was the result of combining a very small PTO group with a Parent Cooperative. We agreed to merge for many reasons (that's another topic!)So...we've revised by-laws and seem to be on the right track. As far as I know the old PTO was not a not-for-profit organization. Those bylaws apparently are lost forever so I have no background on it.
So is it neccesary for us to file anything with the IRS?

All of the groups I've ever been involved with were services branches of the school. We operated under their 501(c)(3) status and, therefore, did not file with the IRS. We did submit our books to the school for auditing. We also made sure the staff and school board had copies of our by-laws, agendas, meeting minutes, etc.

Alot of schools do what Crew chief is saying but if your group goes 501 you would have more financial control of your own money. When we started looking at the whole 501 thing we questioned why we would want our own, we were told in our state (NY)that even though it is common practice for groups to go along with their schools number it is not legal. But since no one ever checks it just is so common...whatever you make of this be it. I am hoping that maybe jhb or critter speaks up...

Actually, I don't think that many parent groups [b]officially[/b] act under the school's umbrella. (Although it can be a good model if all parties agree.)

A lot of groups just "exist". They think of themselves as a non-profit and operate with good intentions. But they don't realize they should be formally set up as an independent organization, that there are things like taxes - or at least IRS filings - to consider, and that unless they have official permission to be using the school's tax ID number - they are NOT exempt from state sales tax.

Here are the questions you need to answer.

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• Are you an independent group that runs its own operations, has its own bank account, and controls its own cashflow?</font>
• Does your group bring in more than $5000 GROSS per year in any form of revenue (event tickets, concessions, T-shirts, fundraisers)?</font>

If both these questions are "yes", then you should (in this order):

1) Get an ID number from the IRS. (called an EIN - Employer Identification Number).

2) Check into the rules of incorporating within your state.

3) Check into the rules/steps for being tax exempt in your state.

4) Apply for non-profit status as a 501(c)(3) with the IRS.

Some of these things will be simultaneously, but if you want to incorprate - do that BEFORE you file for 501(c)(3).

Meanwhile, there are other pieces like writing your bylaws, formalizing your processes, and planning your programs that you will also be working on. And much of that will be needed in the documentation for your 501(c)(3) application.

It's not a trivial process, but many of members of the Forum have done it successfully and folks are good about answering questions and helping.

Good luck!

[ 10-24-2006, 10:08 PM: Message edited by: JHB ]

Please keep in mind the 501(c)(3) status affects your organization's federal income tax liability and the ability of a donor to make tax deductible contributions to your organization. State sales tax is an entirely different legal matter and the exemptions vary significantly from state to state. Check with your state's department of revenue or the equivalent to find out if your organization is required to collect and remit sales tax when you sell goods or services.

So once all the paperwork is filed, the IRS has the names of the current officers.

What happens when their terms expires? How do you get the names of the officers changed with the IRS?