It's hard to add much to what Joy has already shared with all of us (thanks again!), but here's one more reason to push for 501c3 status:
Our PTO conducts a fundraising auction. In order for YOUR DONORS to claim their donation as a tax deduction, your PTO must be 501c3. So, if you can't rationalize the process simply on its own merits, consider the risk you are putting on your donors if they were ever to be audited.
B,
Thanks! I have seen your other posts around this site and between you and Joy, have learned quite a bit.
The 990 doesn't seem any more difficult than a Sch. C with all of its attachments and I'm actually looking forward to filling it out. You being a CPA should be able to relate. Like you, tax forms don't intimidate me. Challenge, perhaps, but that makes it fun.
Enjoy your day!
tc & God Bless!
teri
Teri
I was in a similar situation as yours, except that I am a CPA and I was able to ask enough of the right questions to the Administrative office that they finally agreed with me. Once they agreed with me, the principal was right on board and has supported me 100%. As you may have seen from some of my other notes, hopefully you are in a situation where you would not owe any tax. Even if you make income in one year, you probably would have a loss in an earlier or later year. These can be carried over and back so over time a PTO should not owe any tax even if it has not applied for tax exempt status. I agree with JHB that filing for tax-exempt status is not so hard and it is legally the right thing to do. The annual Form 990 is easier to do than a Form 1120, and you don't have to hassle with estimated payments and carrying losses back and forward.
It is unfortunate that you are being ridiculed for doing the right thing. I hope you don't have to resign, but I would do the same if I was in your position and I could not get any support. I have been researching this for the past 3 or 4 months, and JHB is absolutely correct in the information she has presented on this issue.
[This message has been edited by bps (edited 09-18-2001).]
Even though she doesn't believe me, the prez said for me to send her (email) the info and she'll talk to her tax atty. I told her that I can help fill out tax forms (I do my own, business related), and she asked me if I'm an accountant. When I said 'no', she said that she wouldn't be comfortable unless a 'professional' did them.
I guess H&RBlock training doesn't qualify me.
Oh well.
I'm off to the irs web site, gonna print out an 1120A to get a rough idea on $50K+ gross.
1) consult a CPA or attorney familiar with these things (any parents in those professions you might be able to approach?)
2) Call the IRS and ask them how to proceed. The non-profit group is wonderful. I know I asked the rep about something similar and his answer was basically not to let concerns about the past keep the PTO from taking action "now" to correct things. They don't seem have a lot of interest in punitive actions towards PTOs that are trying to do the right thing.
Joy,
Thanks!
I'm giving it one more try. I've called the PTO President and will show her your messages (I've printed them out).
If after our meeting I still get little cooperation, I'll have to resign. I can't be a part of an operation I'm not comfortable with, especially if I can be liable.
The wrong tax id #'s had been used with our bank accounts. Past treasurer did nothing with the 1099-INT's. Last year's was unopened when given to me (dated Jan., given to me in Sept.).
If we're supposed to use total sales from Market Day, our commission (10%) was $4K, which means $40K in sales, plus another $35K or so from those flower sales, santa shop, scholastic books, and the fall catalog stuff (paper, gifts, etc.). And this has been going on for a number of years.
Am I crazy, or have we been wrong????
The only records I have, is the handwritten ledger book, no one wants to hand over invoices or statements.
Do we ignore the past, or fess up?
Thanks!
