I'll second CapeDad. I talked to the IRS on this specific point, and though we might perceive ourselves as only supporting our school, a PTO is NOT a supporting organization in the IRS's eyes.
I know this is an old post, but I understand it now and we had similar difficulty. In the Public/Private Charity section, the options continue to the next page, and it looks like you are out of options. What you want to check off is either g, h, or i. i asks the IRS to determine which section you group belongs. Then you ask for an advanced ruling.
A PTO should not fall under supporting organizations.
If you don't expect too much from me, you might not be let down. <img src=images/smilies/smile.gif>
I just wrote the last posting, but after reading it I do not think I was very clear. The Section or Schedule D I believe you are refering to is for Supporting Organizations under 509(a)(3). I do not know if this really the status that you wish to have as a non-profit. The examples I gave in the last posting are examples of supporting organizations under this tax code.
My suggestion is seek out an expert, lawyer or accountant who actually works with non-profits and does these applications. I ran into a similar problem with the IRS (even though we were applying as a different type of non-profit entity) and they questioned the application because we incorporated as a mutual benefit, rather than a public benefit. In addition, the IRS saw us as a sports club, rather than an entity that promoted amateur sports competition. I work in finance in non-profits, but I hired a CPA who was very knowledgeable about non-profits. He put together a letter addressing all the points the IRS raised with technical backup and code sections and put the whole matter to rest. It was worth every penny.
Supporting organizations are actually fund-raising arms of organziations. For instance a local parochial school has a supporting organzation which they call themselves the St. Ignatius School Foundation. Also the USA Cycling which promotes competitive cycling in the majority of the US, has a supporting organization called the USA Cycling Development Foundation. Their sole role is to raise money for the organization so it does not detract from the mission. There has been a move in recent years to take the development functions out of the non-profits who are peforming tasks necessary to achieve the mission, to a separate fund-raising entity.
My suggestion is if the IRS is questioning you, go see an expert, it will save you lots of effort, time and possibly your ability to obtain a non-profit status.
NOTE to others: the IRS's website points out that a NEW version of Form 1023 is being released now. If you have an old packet that you haven't yet started to fill-out, you'll want to go to the website and read about the revisions. You probably will want to order a new Form 1023 packet.
If you are completing a schedule D, I think you are applying for a slightly different status. I don't think most of us used that form.
Give us more info. Most of us selected either i or (there was another one, was it "h"?) on part III, question 9. It sounds like you selected "e", which then requires Schedule D. Is there a reason? Otherwise, push for changing the selection.
