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This PTO has never filed, but wants to start now..

17 years 1 month ago #56881 by DAE777
Our PTO has been around for 30 years or so and never filed any 990's or other tax exempt documents. For at least the past 5 years, we net about $20,000-$30,000. We want to incorporate and get tax exempt status. Will we be opening up a can of worms and subjecting ourselves to hefty penalties for lack of filing in the past?
Wendy
Nervous Co-Chair
17 years 1 month ago #56882 by andreawisc
Our group was in your shoes about this time last year. The deeper we looked into things, the more convinced we got to file for 501 c (3) status.

This board helped me a lot with all the things in the archive. Special thanks to Joy (JHB). We are official now, and every minute we put into it was spent well.

There were last attempts to stop our move forward by saying that joining a PTA would achieve the same and be cheaper(not if you want all the parents, guardians and staff be members - our expenses to the National and State Organizations would be more per year than the one time filing fee of $500!! - having everyone be a member is a priority for us). When the word came that everyone is using the schools ID and that we ladies (note the condescending way) could save our moneys (the fee) for better use prompted us to ask the school district to give us in writing that we could use that number, otherwise we would go ahead. Of course, the school district officials could not legally do that, so they actually advised to go ahead with the filing process.

We had to rework our by-laws into articles of association plus by-laws, and we went ahead and incorporated for another $75, so we have articles of incorporation and by-laws now. We had a lawyer help with the incorporation and then also with the filing of form 1023 to the IRS. The following is a great web-site:
http://members.aol.com/irsform1023/index.html
We used information out of this archive to have our by-laws and articles of incorporation be IRS compliant before we presented everything three times and then voted on it. Once voted, we filed everything (last day of school and in the last days of the outgoing board). I happen to be on the new board and as a treasurer I must say I feel much better to be overall IRS compliant, because no matter what is written in an organization's by-laws about the duties of a treasurer, any person that is a treasurer has the duty to familiarize him/herself with the tax code, and once you start digging you quickly realize that 501 c (3) is the way to go.

Over the summer we received some letters that may sound scary - but it was just the fact that the mail did not get responded in time due to summer vacation and the school being closed. I called immediately the contact person listed to find out that those are standard letters that go out, that one receives automatic extensions, and that I shouldn't panic. I must say that he IRS official that is our contact person was very pleasant and helpful up to the end.

I definitely recommend going ahead and filing for 501 c (3) status.
17 years 4 weeks ago #56883 by imported_Barbara
Replied by imported_Barbara on topic This PTO has never filed, but wants to start now..
Our School Association has also been around since forever and we also have been netting large amounts of money for the last 5 years (last year we netted approximately $56,000).
The information here about filing for 501 3(c) is great. I'm convinced that we need to go through the process.
I have the same question as DAE777 - if we go and file now will the IRS go looking to what's been done in the past (basiclly nothing)and begin issuing penalties etc?
17 years 4 weeks ago #56884 by <CVmom>
Replied by <CVmom> on topic This PTO has never filed, but wants to start now..
I am new to the treasurers postition and not real familiar with the correct terms but the former treasurer was an accountant and began to file a non-profit tax return for our PTO. Apparently it is no big deal, an accountanting firm prepares it for a small charge ($75). The form that was filed was a 990 EZ --for organizations with a gross receipts of less than $100,000 and total assets of less than $250,000. I know that some other PTOs in are town do the same. This has only been done for the past few years and I am not aware of any pentalities for past years.
11 months 2 weeks ago #172879 by Anonymous
When you filed, did you include historical data?  Our PTO has its letter of determination, but another school in our district does not.  The current board inherited a pile of receipts indicating inappropriate spending and possibly malfeasance, and has no financial data or check register to generate historical information.  They've never had an EIN, and I'm wondering if they can start fresh as a newly formed organization and basically claim the new org had nothing to do with any prior groups or activities. 
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