Filing for 501(c)(3) status is normally a good idea. Among the other benefits, donations to your group will be deductible as charitable contributions. It also gives you more credibility as an organization.

However, it's not required for very small organizations. The rule of thumb with the IRS is that if an organization brings in more than $5000 (all sources, not net), then it should formalize.

In fact an organization under the $5000 threshold can kind of declare itself a 501(c)(3). The problem is - there's no one to verify that status. Since you never filed for formal recognition with the IRS, you dont exist to them. But if you look at the instructions for the 1023, it says it is not necessary for you to file if you are below this threshhold.

If you want to proceed, definitely call the IRS. With the huge backlog of processing applications they are facing, I don't know if they accept/encourage applications from the less-than-$5000 crowd.

It used to be you never applied for status and and never had to file an annual return/report - so the IRS knew nothing about you (and didn't need to). But now, you'll at least have to file the 990N (postcard). So it may be that the IRS begins recognizing these little 501(c)(3)s without you have to file or pay any fees.

As you learn more, please share with us.

You may have found this already; the user fee is $300 if the organization's average gross receipts over a 4-year period have not or will not exceed $10,000 annually; if average gross receipts have or will exceed $10,000 per year, the user fee is $750. See page 12 of the form 1024. Make sure you follow the instructions for how to determine your "gross receipts."

The IRS will not send it to you automatically, but you should be able to find it quickly at Internal Revenue Service

I think it's $500 for smaller organizations (based on gross revenues).

Hi! I am new to our school's PTO and was elected President this year (mainly because no one else would do it). I am lost most of the time learning all the rules to PTO but it's been great! My question is about filing for tax exempt status. I have gotten our state tax id # and opened a new checking account. I got the Articles of Incorporation certificate from our state (Arkansas). Will the IRS send me the form to file the 1023 for tax exempt or do I need to notify them? We are a "very" small school (K-12 less than 750 kids total). We may not have more than $2k in our account ever. Do you think the 1023 will still cost us $750? What do I need to do? Of course I need to spend the very least but I want it done correctly for the future. Thanks for any help you can give me.
Sincerely,
Mandy PTO Mom