DrWu;135437 wrote: Why not? Are we considered a legal entity of the school as I have described things. I guess my follow up question would be. Are there a legitimate, legal PTO bodies that don't incorporate? Sounds like most do for liability and control reasons but also tax purposes.

If your group is using the schools EIN, Tax ID, etc - you're considered a branch of the school (as is the bank account) , is my understanding - your not really separate from the school. At least in CA there are two basic Corporations Private/Public ie LLC Profit or Non Profit (ie 501c3, 501c4- Public Benefit, Religious, etc) being Incorporated is an extra layer (of legalness, liability, etc)

From my understanding a PTA or PTO wether using school EIN or its own - the exec board still has some sort of liability protection (thru regular insurance or PTA's or school if your not separate) then wait for IRS approval

If your not totally separate from the school I'm not sure if you could Incorporate

It really boils down and how separate (and the finainces) you want to be, what state your in and how much work the group wants to do

ie In California its best to Incorporate (not always neccessary by state but IMO brings greater liabilty protection and assets to the group as well as the exec board) as a Public Benefit Non Profit (501c3) thru the Secretary of State (Articles of Incorporation, Exec Board Roster and $20 is sent to Sec of State

then file SS4?? (I cant think of the actual form #) for EIN and the nonprofit tax ID (the big giant long form) plus pay your $500 or $750 fee (depends on estimated gross fundraisng $$$'s)

Then you'll be XYZ PTO a Private (Public Benefit) Non Profit separate from the school

As a follow up to my follow up. If all we want is a separate bank account will an EIN suffice w/o incorporating?

Shawn;135425 wrote:

with your current setup I dont think you can incorporate

Why not? Are we considered a legal entity of the school as I have described things. I guess my follow up question would be. Are there a legitimate, legal PTO bodies that don't incorporate? Sounds like most do for liability and control reasons but also tax purposes.

DrWu;135422 wrote: 1) Should we become an independent organization from the school? (ie get an EIN, establish our own back account and apply for state and federal tax exempt status). Currently, the school maintains an account for us that we are free to use in accordance with our bylaws.

Depends on whether you want total control and want to go throuhg the process of becoming truly separate; your current setup the school technically has total control over the $$$ since its their account; many have good relationships and no problems with the school.

My personal opinion I wont want it done under the schools ID, school account etc - posibliity of too many headaches that cant be solved since the $$$ is under school control

DrWu;135422 wrote: 2) Under our current set-up, are we liable for taxes?

Depends on your state

DrWu;135422 wrote: 3) Is incorporation a must in order to protect the officers from liability?

For extra liability protection it is a must- with your current setup I dont think you can incorporate

DrWu;135422 wrote: 4) If we get an EIN and incorporate but do not apply for 501(c)3 status, do we face tax liabilities?

Yes, you would just be a corporation (LLC etc) not a Private Non Profit (ie 501(c)3) thus subject to tax liabilities

DrWu;135422 wrote: 5) What is the $5000 limit that I keep reading about?

For the new EZ form, I believe



Legal Discalaimer: The advice of this poster AKA Shawn (although having a law degree) in no way constitutes sound legal advice or in anyways makes this person liable for information which could be outdated, misinterpreted and is just an opinion

I am currently working with a brand new PTO at a k-8 elementary here in Oregon. We raise over $5000 a year in funds that are spent on a variety of things from a school reader board to uniform closet stock to buying books for the library. We have adopted by-laws taken from others found on the internet. We are not incorporated nor do we have a EIN. I have a few questions for those veterans around here.

1) Should we become an independent organization from the school? (ie get an EIN, establish our own back account and apply for state and federal tax exempt status). Currently, the school maintains an account for us that we are free to use in accordance with our bylaws.

2) Under our current set-up, are we liable for taxes?

3) Is incorporation a must in order to protect the officers from liability?

4) If we get an EIN and incorporate but do not apply for 501(c)3 status, do we face tax liabilities?

5) What is the $5000 limit that I keep reading about?

Thanks in advance for your help.