Question: Tax Exempt & 501(c)3

I've been a member of our school's PTO for 3 years now, & was asked to be Secretary 2 yrs ago since I was the only other person besides the President & Vice-President actually attending & helping out. We have no Treasurer & the President has to take care of the finances. The ckbk was just handed to her 9 yrs ago when the superintendent declared that no one working for the school board was allowed to control the monies. We have had a couple more parents join in & were trying to figure out whether or not to file for tax exempt & 501(c)3 statuses. The president will be finding out how the bank acct was opened (no tax id that we know of) & I've been researching info here. We usually start the school yr off w/ about $1250, sometimes less. We also don't have a formal setup of Robert's Rules & bylaws, etc. We have to ok everything through the principal & vice-principal & most times the superintendent also. Where do we go from here?

Asked by crysharkins



Advice from PTO Today

Craig writes:
The challenge with 501c3 is that there are annual paperwork requirements that you must keep up with. A group in your situation, having been around for many years, the easiest way to apply for 501c3 would be to incorporate first. That's because the IRS considers an organization new as of the incorporation date. But incorporation also has important annual filings.

In your situation, with the same president for nine years and only three active members, I'd be concerned about transition. When you are gone, will there be someone to stay on top of this? If not, you might be better off operating as a committee of the school. You would use the school's EIN on your bank account but otherwise probably continue to function as you do now.

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