I'm not so sure that saying the PTA seizes your money is correct. In Nevada, you are required to spend it down before you initiate your PTO or it must be donated to another non-profit/charity.
As for your bylaws and following the dissolution process, they are there to make certain that all parents are protected and informed in the decision making process. And yes, State does contact the IRS otherwise there are tax consequences.
Tim is correct, it isn't illegal, but it would be correct to do it properly to keep things cordial.
Not sure what you're disagreeing with (and not sure about the "DAH!!").
The IRS may be notified of your decision to disband (depends if state PTA feels like notifying -- doesn't happen in many cases). But that's independent of your PTO.
Your PTO would need to apply for its own 501(c)(3) status, if it desired to be legally a nonprofit with IRS. But, as noted, the disbanding PTA process and the starting PTO process are entirely separate in the eyes of the IRS.
Not trying to be difficult, but I'm still not sure what you were disagreeing with.
I beg to differ. If you are a PTA and are under the 501 3(c), once you disband the goverment is notified that you are no longer a PTA and you must reapply under your new parent group to be tax exempt. You cannot go under PTA any longer. DAH!!
...and continuing Tim's comments, there are reasons to make sure you properly go through the disbanding procedure. I don't believe anybody on here that has made the switch has had their PTA assets siezed by the state PTA. However, most state PTAs have a required bylaw that essentially says "if you don't leave correctly, you have to give us the money as you go."
I believe the original intent of such bylaws was to make sure funds generated under 501(c)(3) regulations were properly disposed of, and not just deposited into the last treasurer's bank account. More than once, the rules have been referenced in an effort to bully a group into staying PTA. So my advice is essentially "be sure you aren't the group that is used to make an example."
Dot the Is. Cross the Ts. Then scratch off the A and write in an O.
Wouldn't agree exactly with dearborn -- especially about the "illegally" issue. Laws (legality) and PTA bylaws are two different things.
I think it's more correct to say that your PTA has technical disbanding procedures and if you don't follow them then your PTA will still technically exist as an entity. (Although if there are no officers and no funds and no members....)
If you don't disband your PTA technically correctly, that doesn't in any way reflect on your PTO or make your PTO illegal or "under an umbrella" or anything else. Your new PTO is an entirely separate legal entity and the status of the ending PTA has nothing to do with the new PTO. In fact, oftentimes the easiest way to make the transition from PTA to PTO is to start up the PTO before the PTA is all the way wound down. In that way, you can be sure that there's no gap or downtime during the transition.
The common misconception is that the PTA "becomes" a PTO. That's not true. A PTA ends/disbands. A completely different entity (PTO or other) begins. It's entirely legal to have both in existence at the same time.
Stacy,
you need to contact a state PTA representative. If you change from a PTA to a PTO, you are obligated to disband formally. There are certain proceedures to follow, other wise you are still operating under the PTA umbrella illegally.
