Julie - your PTO can get a tax identification number (also called an EIN, employer identification number) by filling our IRS Form SS-4 from www.irs.gov. With the form/info in hand, you call the IRS at the number on the form and you'll get an EIN over the phone, no charge.

That's easy. With an EIN, your PTO can now open a bank account that is tied to the group, not to an individual, or to the school. Getting an EIN is just the first step to becoming a federally-registered tax-exempt organization (if that's what your PTO wants to do). Read JHB's post above which addresses tax deductibility.

Melanie is right,the form to apply for federal tax-exempt status (Form 1023) is a whole bunch of pages, and the fee is $500 if your PTO usually grosses over $10,000 per year ($150 otherwise). It's a bit daunting, but not an impossible task. Many, many PTOs successfully apply without the services of a lawyer. Even if you hire a lawyer, you will need to provide the lawyer so much information that only your members/officers have access to, that you're doing most of the hard work anyway. For example, the attorney can't fill out the financial questions unless you can provide the financial data. The IRS is also very helpful clarifying the questions in light of a PTO. And these guys (PTOToday) has a book that walks a PTO tbrough filing the Form 1023. Sorry to digress from the original post...

Julie,

I am the President of my son's schools PTF (Parents, Teachers and Friends) and just discovered that our group never applied for a 501c3 status (the Federal Government Tax Exempt program). I called the IRS and was told to visit their website to download the forms to apply. There are about 45 pages that need to be filled out and if your group takes in over a certain amount (I think it was $5,000) there is a $500 fee to apply. You really need a lawyer to help with the paperwork and you must give a lot of information. You can apply for an EIN (employer Identification Number) and some companies will accept that in lieu of the 501c3 number. Most large companies (United Air, Us Air, Vermont Teddy Bear, etc) will not give to a group unless you prove to them you are a non-profit with the Federal Government. Hope this helps!

I would like to find out what do you have to do to get a Tax ID Number? I have tried several times to get that information from my son's school so we can get our bank account started. I have had no luck, just alot of run around.

Thank you,
Julie

Oops, I meant "it's all clear to me NOW"...

Thanks so much for your replies! It's all clear to me know. I think the board has not been willing to undertake the work to make us non profit, but (hopefully) I will be ON the board next year and can push for that change. It makes it so hard when writing grants, asking for donations, etc, when I have to route everything through the school...

Originally posted by tjbeath:
Just out of curiosity, why would a PTO choose to be "for profit"? Ours is, but I don't know why. Doesn't everything we make go back to the school?

Well, to be non-profit, you have to have the 501(c)3... but not having it doesn't mean that you are 'for profit'... many small organizations that are volunteer run but haven't incorporated or obtained 501(c)3 status refer to themselves as 'not for profit.' Seems like a minor difference in verbiage, but most people associate the term non-profit contributions as being tax deductible. Not-for-profit doesn't hold the same implication and many feel 'safer' using that terminology.

While everything that you do probably does benefit the school, all the moneys don't necessarily go directly back to the school.