Question: Non-PTO groups wanting to put funds through our PTO
(Our PTO is for the entire district, not any one school) We have several groups in our school who ask if they can put their fund raising monies through our PTO. For example, our Elementary School wants to hold a golf outing. It is not a PTO event, although we may help. The Principal thinks it will be difficult to push the idea through the school system... and, he wants all of the money raised to stay in the Elementary School. The money would be deposited in our checking account, and then we would write a check to the Elementary School for the exact amount. Should we be doing this? Is it legal? We've had this come up for different groups who are having basket raffles, etc. Please help! They are looking for an answer from us!
Asked by Karen50
Advice from PTO TodayCraig writes:
Don't do it. This sounds like a helpful thing to do, but it opens a dozen cans of worms, from record-keeping to reporting to the IRS -- not to mention a hundred little details like who handles bad checks, who pays bounced check fees from your bank, etc. We heard about one group that did this and was actually investigated under the Patriot Act because of the large sums of money going in and out of their account quickly. The last thing you want is to have to pay attorney's fees because you tried to be helpful. Also, once that money goes into your account, the IRS considers it income for you. That means you have to account for it on your Form 990 (annual information return). A solution for the elementary school you mentioned might be to get an EIN from the IRS for this specific event and open a bank account for it. That would keep the money separate from the elementary school account and out of the PTO account.
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