Question: End of year gifts to exiting Officers

Can an PTO with a 501c(3) status purchase small gift cards for outgoing PTO Officers with PTO funds?

Asked by Anonymous



Community Advice

badpants writes:
You can use your money to purchase anything you'd like no matter your status, unless your by-laws specify otherwise.

Advice from PTO Today

Craig writes:
Yes, as long as the amount is small. We've heard attorneys recommend keeping gifts to no more than $20 (the federal limit for gifts to government employees) to be safe.

Advice from PTO Today

Craig writes:
Badpants -- Unfortunately, it's not quite true that you can spend your money any way you'd like. If your group is tax-exempt, the IRS requires you to spend money in a way that's consistent with your mission. As a PTO, you have to spend your money to support the students and the school. There's a lot of leeway in that definition, but it doesn't allow you, for an extreme example, to buy a new truck for your cousin's catering business. The IRS also limits the time and money you can spend on lobbying and bans any spending to support candidates for elective office. You also can't provide a significant private benefit for an officer -- for another extreme instance, sending the president on a vacation to Aruba. Giving thank-you gifts to officers is OK as long as the amount is low. But even giving a gift worth $50 or $100 could be a problem. For one thing, it might be considered wages and be taxed by the IRS. And by the way, even if your group doesn't have official 501c3 tax-exempt status, you should follow these rules. They're not difficult, and if the IRS does happen to come calling, you'll be better off if you acted like a tax-exempt charity all along.

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