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501C3 requirements

23 years 2 weeks ago #94282 by Critter
Replied by Critter on topic RE: 501C3 requirements
I am a member of 2 PTO's, neither of which is currently 501c3 registered. As treasurer of one of the PTO's, I have begun to research what we need to do. I probably wouldn't worry so much about registering, but we hold a fundraising auction every other year and we have always assumed that because we have a tax id #, donations to the auction are tax deductible for our donors. That is not true. A tax id # is just an identification number and not an indicaiton of any status. Like JHB, I have found the IRS website and telephone reps very helpful. It is my goal that our PTO be officially tax exempt in time for our next auction. For anyone who feels intimidated by the filing process, find someone in your group who doesn't and give them the job.

Call the IRS at 1-800-829-3676 and ask for a copy of the following: Publication 557 (how to file for tax-exempt status), Form 1023, Form 8718, and Form SS-4. This seems to be the tools you need to sor this out. Good luck.

[This message has been edited by Critter (edited 02-13-2001).]
23 years 1 month ago #94281 by JHB
Replied by JHB on topic RE: 501C3 requirements
In my previous response, I focused on the receipt issue and failed to answer your more general question about becoming a 501(c)(3).

First, be sure to do a search of the PTO forums using keywords like "501". (Hint, be sure to choose something besides the default of "Show Topics from the Last 45 days". There's great stuff posted in older discussions.)

Anyway, to become a 501(c)(3), you need to

*have some good organizing documentation (i.e. constitution and bylaws),
*be able to articulate your purpose, agree to follow certain IRS rules (i.e. limits on political activity),
*prepare a simple budget projection 3 years out,
*have someone willing to wade through the application
*pay the one-time fee of $150 or $500, depending on your gross income

This assumes, of course, that you are a qualified organization. Any PTO created and legitimately pursuing the type of activities we discuss in these forums should qualify.

The key benefits are that contributions to your organization can be tax deductible for the donor and having the 501(c)(3) designation gives you more credibility. There are other benefits you can pursue, such as non-profit postal rates, if you choose.

I had absolutely no knowledge of any of this stuff less than a year ago. But, there's a lot of reference material on the Internet, the IRS representative are very helpful, and the people on this forum are incredibly generous with their advice. So don't be afraid to proceed.

Good luck!
23 years 1 month ago #94280 by JHB
Replied by JHB on topic RE: 501C3 requirements
We've just gotten our 501(c)(3) status approved, so I'd be happy to share information. I'm not an accountant by any means, but have been struggling to understand some of the pieces that affect us.

It seems that there are disclosure requirements when receiving contributions of $250 or more, and for contributions over $75 for which the donor receives something tangible in return.

However, for the $75 item, the disclosure could be made at the time of solicitation or at the time of receipt. That will work well for us in the rare cases we need it, as we could include the required language in our original flyer and let the donor use that plus their check stub for their own backup.

We'll probably have a receipt book on hand for people who request one, but I don't see us beginning to issue dozens and dozens.

Try visiting and viewing the FAQs in the Financial Management section. FAQ 14 deals with some of this.

Here's another source from the IRS:

I'd love to hear from any others about this topic.

[This message has been edited by JHB (edited 01-22-2001).]
23 years 1 month ago #94279 by BrenC
Replied by BrenC on topic RE: 501C3 requirements
We're a 501c3 and we don't do that. Maybe we're wrong, but I've never heard of that. if you're aparent group and your working on behalf of kids and the school, I bet you'll qualify.
23 years 1 month ago #94278 by Meg27
501C3 requirements was created by Meg27
We have not yet applied for 501C3 status for our PTO. I'm not sure if we can fill all the requirements. Is it true that when doing fundraisers we would have to issue a receipt to any family that purchases something from us? What other requirements would we have to follow? Any advice would be appreciated. Thanks
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