Effective July 1, 2008, several clarifications and improvements have been made (Tennessee regs summarized here). The end result: common sense (and parent groupos and kids around the state) win!

In a nutshell, a needed distinction has been made between school funds and school events and parent group funds and parent group events. Parent groups aren't required to be 501(c)(3)s and funds are not required to be run through the district. Financial best practices still encouraged. Nice.