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Is your group tax-exempt? Incorporated? Does it have its own tax ID number? How to find out, and keep your legal records up to date.

by Sandra Pfau Englund


When I was elected president of the grade school PTO this past spring, I was told that the group was a nonprofit, tax-exempt corporation. I soon learned not to take anything for granted; neither the state nor the IRS had ever heard of our PTO. I learned a valuable lesson: It's important to check the legal status of your parent group and to make sure all the records are up to date.

Corporate Status

To find out whether your group is incorporated, you can first check to see whether a corporate database exists on your state's website.

A handy resource is available on the IRS website, where they've gathered relevant state links for exempt organizations into an easy-to-use list. Click on the link for your state, then click the link for "State Nonprofit Corporation Filings."

Once at the state incorporation site, you usually can find a searchable corporate information database. If you're having trouble, call your state's office of the Secretary of State and ask how you can find out whether your PTO is incorporated.

Federal Tax-Exempt Status

It's also a good idea to check whether your PTO has applied for and received recognition from the IRS as tax-exempt under the federal tax code. Federal tax exemption excuses the group from paying federal income tax on the organization's net income. IRS rules require that all individuals and organizations file the appropriate tax return if gross income is $5,000 or more. Without IRS recognition of tax-exemption, an organization cannot be sure whether it is exempt from paying federal income taxes on any net income.

To check federal tax-exempt status you can go to the IRS website. Once there, type "Publication 78" in the search box and then click on "search now." Note, however, that the IRS search does not always produce accurate results.

You also might want to call the IRS Exempt Organizations Unit at 877-829-5500. A warning: It may be difficult to get through. The IRS suggests that Tuesday through Thursday afternoons work best.


Each organization should have its own employer identification number, regardless of whether the PTO is incorporated or tax-exempt. This is true even though the group has no paid employees.

An EIN generally is required to open a bank account. Frequently, however, PTOs use the school's EIN. To check whether your PTO has its own EIN, ask the school for its EIN. Then check the EIN being used for your bank account. If the PTO is using the school's EIN, you can easily get your own online at the IRS website, www.irs.gov. Simply type "EIN" in the search box. You may also apply by telephone or fax. Complete instructions are available at the IRS website.

Sales Tax Exemption

Exemption from sales tax is granted at the state level by the state taxing authority. Most states provide a sales tax exemption number that allows nonprofits to purchase things without paying sales tax. Frequently, however, PTOs use a school's sales tax number incorrectly.

While it may be legal to use the school's number for items purchased directly for the school, the PTO generally should not be using the school's sale tax exemption to purchase items for use by the PTO: materials for the fall fundraiser, refreshments for PTO meetings and events, and the like.

Ask the school for its sales tax exemption number to check whether the PTO is using the school's number or has its own. If the PTO does not have its own and wants to apply for one, go to the state website to check for information on how to apply.

Again, you might want to start at Findlaw.com and search the government information available for your state. States all differ on what types of organizations may obtain a sales tax exemption. Check the rules for your state carefully.

It's a good idea to start a corporate PTO notebook to keep legal documents. You'll create a valuable corporate memory for your successors.

Sandra Pfau Englund is an attorney specializing in PTOs and other nonprofit groups.


# Carrie Williams 2008-07-10 01:15
I just completed my first year as PTO president and found out about taxes.
I have no clue what we should be doing?
Is there someone, besides the IRS, that can walk me through how to fill out these forms. It is so time consuming and I just do not have the time.
It was brought to my attention from our Treasurer that she thought we needed to do something. She was never shown from our previous treasure of 2 years ago. Now it looks like we are 2 years behind in filing. Someone please help I just do not know where to turn. Our school is in Roselle Illinois- is there someone I can talk to in my area?
Thank you
Carrie Williams
# Craig Bystrynski from PTO Today 2008-07-10 09:27
Hi Carrie--I have two suggestions for you. First, the article "501c3 for PTOs" will give you an overview of the process of applying for official tax-exempt status from the IRS. Here's the link: http://www.ptotoday.com/pto-today-articles/article/394. Second, we have a toolkit that walks you through the process, including filling out the form line by line. We do charge a moderate fee for it, but it's very detailed and we spent many hours doing the legwork for you with the IRS. I think you'll find it helps a lot. It's the PTO Startup Toolkit, and you'll find details here: https://www.ptotoday.com/store#!/category/1002. Good luck! -- Craig
# Penny 2008-07-26 09:57
Are taxes files on the calendar year or the school year? Our PTO fiscal year is Sept - Aug.
# Craig Bystrynski from PTO Today 2008-07-29 21:44
Hi Penny, When you file is based on your fiscal year. Your Form 990 is due on the 15th day of the fifth month after the end of your fiscal year. In your case, that would be Jan. 15. The story Tackling Your PTO Tax Return, http://www.ptotoday.com/pto-today-articles/article/392, provides more information and step-by-step instructions for filling out the form. -- Craig
# Kim Lane 2008-09-17 23:52
Hi Penny, I just finished setting up our PTO. I am the treasurer it has taken about a year. I had an accountant to help me. But I am finished!!! If you still need help let me know. I live in GA.
# Josei 2008-09-27 02:35
I am the new president of our parent group and we are in the process of changing to a PTO. I spoke with the Secretary of State and we are not registered. But we are registered with the Dept of Revenue. Dept of Revue states that we can make the name change and just register as a Trade name and mail a letter to them and they will make the change to their end? We are making changes to our bylaws, does this mean I have to start from scratch and fill out form DR0175 New Application for Exemption? Help, I am so confused!!! Thank you***Josei
# Shelly 2008-11-04 20:34
I too entered the long dark tunnel of filling out all of the paper work to become a non-profit... We took the easy way out. We held a sandwich sale and the proceeds went to pay a lawyer to do it all for us. We all feel much better about the whole thing knowing that someone who knows what they are doing is taking care of it all for us.
# Laura 2008-11-15 00:23
Our district built a new 7/8 school, so the PTO expanded to become one PTO for the 5/6 intermediate school and the 7/8 Middle School. Now the two schools want their own individual PTO's so they don't have to 'split' the money that is raised collectively from the families of all 4 grades ( one feels they raise more money than the other). I wanted to talk to a PTO that may have already been through this. Trying not to reinvent the wheel.
# penny 2009-01-03 00:38
I struggle year after year with filling out the tax forms for my PTO. I have called around the area and am unable to locate an accountant willing to do my taxes....and in all honesty, if I do find one I'm afraid they will find many mistakes I've made in the past which will create a big mess. Any suggestions?
# Interested Parent 2009-01-26 19:22
I am interested to find out if Section 5310 (b) (1) of the Nonprofit Public Benefit Corporation Law of the State of California is available online. I tried googling it exactly as it is worded in our PTO's handbook but the items that come up have to do with CSU's. I put in a request to the PTO president of our school but as yet, I have received a copy.
# Stacy 2009-03-05 17:17
Our school just formed its first official group of officers and bylaws. We have nothing from previous years that states we filed taxes.
Can someone help!? We are not tax exempt. What do we do? Do we have to file? What will we need?
I know absolutely nothing!
# Lisa Smith 2009-05-06 20:05
I am having problems with our school trying to control funds of the pto. We opened our own account because it was approved by the pricipal and board. But some jealous teachers have went over their head to try to keep our funds and keep the PTO from participating. Can the school close our account and do they have the power to shut the PTO down? Where can i find information about how much power the school has over the PTO, especially to shut it down. Oh it's a Charter School, so I know its a whole different story
# Nadia 2009-06-05 10:56
I know there is a $500 minimum of funds that should be rolled-over from year to year, but is there a maximum allowed? In others words do most PTOs spend pretty much what they make that year unless they're earmarking it for something big like a playscape?
# Lisa @ PTO Today 2009-06-05 15:47
Hi Nadia - This is a good question for our message boards. I have re-posted your question here:
Good Luck ~ Lisa
# Ruth Sanchez 2009-08-31 18:08
Hi, we changed from a PTC to a PTO last year. the previous board dismantled and threw everything they had away. We had trouble opening a bank account among other issues. The President resigned and I kind of began to take over in March of last school year. We have an account but are not sure what we are suppose to do with appling for taxes and all that stuff. The VP took the treasure position and has kept an account of what we have taken in. We are unsure of what to do for last school year and don't want to make the same mistakes this year.
# Vanessa Braaksma 2011-07-29 00:45
Hello, I am the incoming PTO president at our intermediate school and was handed a letter that came from the IRS letting us know that we are in default and can no longer conduct business until resolved. According to the IRS we need to provide a letter of determination by our parent organization - I have no idea who that may be and neither does the previous president. According to our files we do show a group exemption number but I am clueless on how we came to be under that number. Is there a way I can find out who that exemption number belongs to? Any help would be greatly appreciated.

Thank you,
# Craig Bystrynski 2011-07-29 14:07
A letter of determination is what you receive from the IRS to show that your group is tax-exempt. To receive a letter of determination, you fill out IRS form 1023. It's quite detailed, but you can do it yourself -- many groups have. (Our PTO Startup Toolkit walks you through the form question by question.) I'd recommend calling the IRS -- if they gave you a specific number, call that. Otherwise, use the nonprofit help line: 1-877-829-5500. Explain your situation -- that you're an all volunteer PTO, the leadership has changed over, you're unsure of your tax status, and you received this letter.
# Craig Bystrynski 2011-07-29 14:08
Vanessa-- My comment was too long, so here's part 2 (part 1 below): Filing form 1023 may be enough, but it does take several weeks to a few months to get a determination. If they indicate you may be subject to fines or back taxes, I'd recommend consulting with an attorney experienced in nonprofit law or a CPA who has been through this situation. In general, the IRS is seeking to get all PTOs to file form 1023 to become tax-exempt. They're not necessarily trying to penalize you, as long as you have acted and continue to act in good faith. Good luck.
# Vanessa Braaksma 2011-07-30 21:51
Thank you Craig - I appreciate the help!
# Meredith 2012-09-19 00:49
I am the new PTO treasurer and just discovered that though we have been acting as an exempt organization (incorporated, filing 990's, giving it deductible receipts) we have in fact missed the 27 month deadline by not filing the form 1023 with the IRS. I have contacted the IRS and know nex steps to get the paperwork in, however my question is about liability. Is the current board to be held liable even though none of us were on the board when the deadline passed? This would be in the case of a corporate tax lien for the last three years (since we're not exempt) and possible lawsuits if a donor is audited and they present a donation receipt from a non-exempt organization. Any help would be appreciated!
# Dixie Sturgeon 2012-09-28 16:21
I would like to no about the president for pto .I am the vice president. our president dose not show up for any thing we do at school .me as vice president i do mose of it all so what can we do about get a new one . since school start no p.t.o meeting. because he would not make a date . so i did that I have been at my school for 14 year . i love helping our kids all teacher and i have been vice president for 4 year so could you please write me thank you ms sturgeon
# Sally 2012-10-10 21:08
Hi do any of the PTO things posted here apply to a Charter school or is this just for a Public School? I have my Charter School Board wanting to have our funds going into their account and they don't want us to be a separate entity. Is this possible?
# Amy Skultety 2012-10-25 20:32
I check the irs.gov site and searched for Publication 78, but as of Aug 2012, they no longer publish it.
# Craig Bystrynski 2012-10-26 13:57
Amy -- Thanks for the heads-up. The IRS now has a search function to check your tax-exempt status. It's available here:


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