Aah, we are definitely operating "off radar" then. Unfortunately the prior treasurers were not savvy to this rule. I'm holding with the IRS right now to hopefully get a plan of action and whether we can get an extension.
As far as whether or not you are supposed to be on file with the IRS, here's the rule of thumb.
If you are acting as a charitable organization and bringing in more than $5000 GROSS revenue per year, then you are supposed to formalize your group and apply for the proper status with the IRS by filing Form 1023. Then you will be a recognized tax exempt charitable organization at the federal level.
The $5000 threshold is everything that comes in - membership, fundraisers, donations, etc. It's not net or profit.
If you bring in more than $5000 and are not a 501, then either you are regular business and should be filing a commercial return or you are operating "off radar" and simply not declaring yourself, so (according to the IRS) you would be operating illegally.
Note - the "gross proceeds" test of $5000 is actually a bit more complicated. You can see the real language on the IRS website. But the shorthand version is "more than $5000".
To get a 501(c)3 status, it takes about a year. You have to file Articles of Incorporation (or association) with your State, and then file papers with the IRS along with your Bylaws and a filing fee.
I gave up holding on line with the IRS - I'll try calling later.
Also called our school district business office and the acting director was clueless that booster groups had to file (uh, oh).
Our PTO had been around for 20 years and never filed a tax return nor the 501c3 application (1023) ...
The IRS did send me a letter when I submitted a Form 990 this summer, saying my group was not recognized as tax-exempt, why was I filing that form? I thought it was curious, though, because I had checked "application pending" on that form -- and they didn't ask any questions about the three 990-EZs I had filed in the spring, shortly after I submitted my 1023.
Our booster group has been around for 30 years and never filed a tax return before. This is becoming a kettle of fish!
I do know a 501(c)(3) requires lengthy documentation to get that status.
My music booster group has never done that and I am involved in 2 other nonprofits who are 501(c)3's and jump through the hoops every year to maintain their status.
Momski -
I'm with JHB; if you promote music education, or the music program in a school, then that's likely a 501(c)(3).
But your determination should come when you file Form 1023, and the IRS won't accept your Form 990 unless you have filed: you can't file a tax-exempt return unless you are a recognized tax-exempt organization.
