Q&A

Tax returns

I am the new treasurer for out PTO. The president was around last year but really doesn't know much. We are not tax exempt but do have an EIN. Are we required to file tax returns? I've gone through all the papers available and I have a letter from the IRS dating back to 2003 but I only have bank statements as far back as Aug 2011. I'm concerned that now that I want to file for tax exemption the lack of information will be a problem. I feel like I am in over my head with all the information out there and the IRS asked questions that nobody knows the answer too. Any help will be appreciated.
- Roseydaisy11

Some version of this question pops up fairly regularly on the message boards on this site. The best answer to it, posted by "JHB" is below--it's basically the instruction to start fresh:

We faced a similar situation several years ago. Previous officers said (believing it to be true) that we were an established non-profit. Like you - I learned they had absolutely no clue what that meant and merely repeated what someone told them.

After talking to the IRS about options, we chose the "start fresh approach". I didn't have access to records or sufficient information from past years. (And frankly, I wasn't all that crazy about cleaning up someone else's mess.) We started a new organization that operated legitimately from that point.

Regarding a comment earlier in this thread, don't confuse the state and federal levels of this. The process is (abbreviated):

Get EIN from IRS (your tax ID, can do it online or via phone, no cost, instant)

Start organizing your group - structure, bylaws, etc.

Incorporate - done at the STATE level. Optional but has benefits.

File for 501(c)(3) status with the IRS - complex, $850, takes awhile

Investigate Sales Tax Exemption at your state level

As far as getting help... The process takes some due diligence, but it is doable without professional help. Especially if you get the kit from PTO Today or at least consult with some of the more veteran members in the Forums. If you could get legal/CPA services donated, that would be wonderful. But I wouldn't PAY someone to file for you. You can the expertise/help you need here from other PTOers.
- mum24kids
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As an aside to this, as part of cleaning things up you should adopt a record retention policy for your group. Only having records going back for one year isn't very good. There's a sample policy here: http://www.ptotoday.com/filesharing/getrateit/1030-pto-record-retention-rules
- mum24kids
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