I just read some advice from a non-profit guru who said that deducting donations to groups who meet all the 501c3 qualifications may be allowed by the IRS, even if the group hasn't yet applied for non-profit status. However the IRS is more likely to deny a contribution made to a PTO that has not been recognized as tax-exempt.
Allow me to add a little more to the great info already provided...The annual tax return to the Feds is Form 990. If you see any of those in your files, hopefully they've been filled out and returned. [More than likely, your PTO isn't yet 501c3 and so the IRS wouldn't have sent you a Form 990 yet.]
The letter we got when our 501c3 was approved isn't anything very special looking. It's called a Determination Letter, but it's not a certificate or embossed, doesn't have a special seal or new "tax exempt" number, or anything like that. You'd think that with all the work it takes to apply, we'd get something more than a wordy letter back. Anyway, the Determination Letter is the proof that your PTO is a federally-recognized non-profit. In our state, I need to provide a copy of the first page of the Determination Letter, along with a form from the state, in order to avoid sales tax at a vendor.
Regarding your school's 501c3 letter - public schools (and churches, for that matter), are automatically 501c3, so they wouldn't have a letter from the IRS.
You have a bit of a dilemma with your donors. Since your PTO hasn't received its 501c3 yet, donations to the PTO are not tax deductible. For the donor in the know, this could be a show-stopper for you. We jumped on the 501c3 band-wagon a couple of years ago, thanks to this forum, because we had a big auction planned. Surprisingly, up to that time, our donors hadn't ever asked for 501c3 proof. It takes about 12 weeks for the IRS to respond to a completed 501c3 application, and a couple of weeks to pull the application together.
I'm reading through my stuff. We are incorporated and 501c3 status. It appears that we applied and received our own federal tax id number, then it requested we fill out a 1023 (under section 501c3)to verify if our enity is tax exempt.
A PTO is tax exempt if it follows the requirements under section 501c3. That means we don't have to pay federal taxes and we have no payed employees, everything benefits the school, yada yada yada. Other enities that donate things or money to us without benefit of anything in return can write this off. If Company X donates to ABC PTO and the tax id number is for School District 123 I don't think things will match up.
I had a nanny one time way back when and applied and received a federal tax id number. I still had to pay all her employee taxes and FICA and FUTA and all that. A tax id doesn't make you exempt.
Now we are incorporated in our state. As a not-for profit corporation. We have a state tax id number and are recognized as a not for profit, that means we don't have to pay the sales tax when we go out and buy things for our events or whatever.
Ask around and see if you have a parent that is an accountant or tax lawyer and you'll probably get some good answers.
An incorporated 501c3 has to file tax forms annually (even tax exempt and with nothing owed) and at least a one page form letting the state know you've changed officers. Stop looking for the 501c3 letter. If you haven't been doing the filing you're not 501c3 or you're in big trouble.
Comes down to the STATE is one thing, sales tax and incorporation. FEDERAL is the 501c3 and is what companies are looking for so they know who to reference when they list you as a write off.
There is no 501(c)3 number per se; there's only your Federal tax ID number. As far as the IRS is concerned, the entity with the number you have now is a taxable entity if they don't show it as being tax-exempt. When you file for your tax exemption, you are going to use the same Federal tax ID number you are now using; it won't change once you get your exemption.
Are you incorporated? There are benefits to this that you should look at before you file for your tax exemption. It's much easier to get your corporate status straightened out, then file for your tax exemption, then the other way around.
How are your by-laws set up? Does the school system think you are part of them, or do they think you are independent? Seems strange that you have your own sales tax exemption certificate and not the IRS exemption, but different states handle that differently.
I have a question regarding 501C3 status.
We have a federal ID # as well as a sales & use tax certificate. In applying to companies for donations for our festival, they are requesting a copy of a letter stating we are a 501C3 org.
I have not been able to find a copy of this letter anywhere in old files which makes me think we don't have one.
We are an elementary school PTO. I called the IRS and they do not have a 501C3 # listed for our PTO but do for the school system. My question is: do we need to apply for a 501C3 # for the PTO?? or do we fall under the umbrella of the school system. If so, would they have a letter stating we are 501C3. I have read some posts here that state the PTO's are a separate entity. We do have our own bank account and control of it.
I am having the IRS send us an app for 501C3 status.
Any advice/answers would be appreciated.
Thanks!
