Practices and Processes to Support Federal ... - National PTA



The Revocation Task Force was created to develop best practices and related resources for state PTAs to use in assisting local units to maintain compliance or come into compliance with IRS guidelines and filing requirements. This task force consisted of staff and volunteers from National PTA and state PTAs of all sizes and capacity to ensure that all states would be able to use these best practices. The contributing states were chosen for their proven results around this topic. We thank each and every member that contributed to this document and hope that all of our state congresses can use this document to help inform their own internal processes.Revocation and Reinstatement SubcommitteeSue Owen – Ohio State PTA Executive DirectorErika Trujillo – California State PTA Assistant Executive Director, FinanceKelly Piatt – Delaware State PTA TreasurerTim Duke – Tennessee State PTA TreasurerHeather Dean – National PTA Deputy Executive Director, Programs and OperationsFederal Compliance SubcommitteeLaura Bay – National PTA Secretary-TreasurerLisa Anderson – Utah State PTA TreasurerRita Lowman – Maryland State PTA PresidentMac Saleh – Michigan State PTA Membership Co-ChairDawn Ducca – Michigan State PTA Field Service RepresentativeLeeAnn Espinoza – Nebraska State PTA PresidentJessica Renzi – National PTA Senior Accounting ManagerResources and Training SubcommitteeJanet Lamoureux – Florida State PTA TreasurerTeresa Willis – Maryland State PTA Office AdministratorDon Romoser – Connecticut State PTA President ElectPam O’Brien – Rhode Island State PTA PresidentSharon Pender – Louisiana State PTA PresidentSuzan Yungner – National PTA Director of Field Service and TrainingContents TOC \o "1-3" \h \z \u Practices and Processes to Support Federal Compliance PAGEREF _Toc353895201 \h 3Training PAGEREF _Toc353895202 \h 3Communication PAGEREF _Toc353895203 \h 4Reporting PAGEREF _Toc353895204 \h 5Collection PAGEREF _Toc353895205 \h 5Review PAGEREF _Toc353895206 \h 5Upon Revocation of Tax-Exempt Status PAGEREF _Toc353895207 \h 7EXHIBIT 1 PAGEREF _Toc353895209 \h 8EXHIBIT 2 PAGEREF _Toc353895210 \h 9Practices and Processes to Support Federal ComplianceTrainingTraining your local units is essential in ensuring the proper and timely filing of Form 990, Form 990-EZ or Form 990-N (Forms 990). The states most successful in the endeavor offered training in a variety of avenues, such as face-to-face, e-learning and/or webinar. As a recommended best practice, these opportunities should occur within 100 days of the newly-elected board taking office, and two board members, including the treasurer, should attend training on Federal Compliance requirements.For your information:IRS FormGross ReceiptsTotal AssetsForm 990-N< $50,000NAForm 990-EZ>$ 50,000 but < $200,000< $500,000Form 990>$200,000 And/or > $500,000Resources found at Form 990-N training with relevant screen shotsForm 990-EZ PTA-focused instructions Form 990-EZ live webinar with step-by-step instructions using the provided 990-EZ template each fallForm 990-EZ PowerPoint with script for states to provide at conventions or other leadership and training eventsMini-training pieces on the following:1099 Misc (available fall 2013)Schedule A & B (info from Money Matters)Schedule GSchedule O990-T (Unrelated Business Income) (available fall 2013)Link to changes in 2013 Forms 990: very effective tactic used by some states in getting their units to file their Form 990s in a timely fashion is a “traveling roadshow.” Using this method of delivery, volunteers and/or staff from the state travel to different regions, set up stations with laptops and help the unit to file onsite, which is very easy for the Form 990-N filers. Summer leadership events would also be a great place to offer this virtual filing. Simply add this to the agenda of your training, and ensure the EINs for the units are readily municationCommunication is often critical to a unit’s success. Several recommended options for ways to communicate with your units are listed below. Select the option or combination of options most effective in your state, and ensure that the communication is regular and timely:E-blasts: Remind units of filing deadlines. These emails can be sent out by both the state and/or regions/councils/districts. Include links to information online. (Exhibit 2)Websites: Post information on state website. Request that your regions/councils/districts post information or link directly to the state and national websites. Include key information like deadlines and links to training opportunities. (Exhibit 2)Training: Consider offering training locally, regionally and statewide. Encourage your regions/councils/districts to offer or host training. Newsletters: Put reminders in your newsletter(s). (Exhibit 2)Conference Calls/Webinars: Offer the chance for specific questions at the state and/or the region/council/district levels.Individual Reminders: Send reminders 90, 60 and 30 days prior to the Forms 990 due dates to units based on fiscal year.Mailings: Include a flier about Form 990 information if you send periodic communications to your units. (Exhibit 2)ReportingCollectionThe states with the best local unit federal filing compliance have within their governing documents (bylaws, standards of affiliation, and/or standing rules) mandatory submission of certain documents to be a unit in good standing. This requirement will not only help ensure that the unit is functioning properly, but also, in the instance where a poor transition of officers occurs, the state can help the unit with accessing prior records.Please note, states operating with group exemptions should be aware that (in accordance with IRS Rev. Proc. 80-27, Section 4) subordinate units are subject to its “general supervision or control.” Collection and review of the above documents will ensure that this provision is met.The following documents may be required by the state in order for a unit to be in good standing:A copy of the Form 990 or Form 990-EZ within 30 days of filing. For the units that file a Form 990-N, a copy of the email confirmation that the form was filed.A copy of the annual review/audit reportA copy of the most recent bylaws, if applicableA current list of board members with contact informationReviewUnit leaders may assume, if they are sending these documents to the state, that they will be reviewed and monitored. Review of these documents can be done by committee, staff resources, random sample or any other method that your state finds effective. Establish a reporting matrix to determine which units have complied and which units may need reminders or assistance.Things to check during the review:Correct fiscal yearCorrect EIN numberCorrect PTA nameNote: These steps may and should be tailored to include state compliance requirements where applicable.Resources:National PTA is exploring the cost of creating a database tool where the above documents may be uploaded, reviewed and stored by the states. Further information will be provided when/if this tool can be developed.Pull the IRS data in Excel format to collect information listed above.? (EO-BMF) .? This would be an easy and efficient way to review the information identified to verify the above.Checking on Compliance StatusA volunteer, preferably the state treasurer or staff person, should monitor the IRS revocation list monthly for new revocations.Resources to look up individual unit status:Link to IRS list of revoked organizations: to search tips: –-Search-TipsSteps to comprehensively review all units for compliance, etc.:Download the “Automatic Revocation of Exemption List,” filter down to applicable state, and then filter to include only name and/or secondary name that includes PTA, PTSA or your congress name: by revocation posting date, review and add units from your state or pull the full download list: : Timing may be an issue where units do not appear as a unit revoked or a unit in good standing, usually occurring just before their status is being changed.Upon Revocation of Tax-Exempt StatusSend a joint letter from the State and National PTAs to the local unit officers stating that the unit’s tax-exempt status has been revoked, offering resources to support the reinstatement process and detailing the consequences of not filing for reinstatement. Resources:Word template customizable for each state (EXHIBIT 1)Share National PTA’s Reinstatement Template and checklist (or links) on the state PTA website, if applicable. Instructions are provided for new streamlined procedures for units within 15-months of revocation, as well as old instructions for units outside of the 15-months. There is also a pre-filled Form-1023. Please keep in mind a new Form 1023-EZ will be rolled out during summer 2014 to follow streamlined instructions. This will be posted on the website as soon as it becomes available for the public to use for filing.Resources:taxhelpRequest local PTAs sign a Form 8821 upon revocation so that the state PTA may speak to the IRS on its behalf. Some states have the practice of becoming the unit’s registered agent. In this case, the state would have similar rights as a power of attorney.Resources:Form 8821 (power of attorney) and instructions: the local PTA leaders to file a Form 1120 business return. Local units only file this return if they choose not to file for reinstatement, relinquishing their ability to operate as a PTA.Note: Notice of reinstatement can take up to one year. Instruct the local PTA leaders to be patient and operate as usual in the interim, but ensure that they know they may not solicit “tax-deductible” donations during this time.EXHIBIT 1[Print on state PTA letterhead or insert logo][Date][Local PTA Name]MACROBUTTON DoFieldClick [Street Address]MACROBUTTON DoFieldClick [City, ST ZIP Code]Dear [Local PTA Name]:Recently, the IRS issued letters revoking the tax-exempt status of numerous organizations, including some local PTAs, for failure to file information returns (Form 990) for three (3) consecutive years. It has come to our attention that you have or will receive such a letter. Per the bylaws of our association, all PTA’s must be tax-exempt (501(c)(3) organizations. [State PTA] and National PTA have resources to help you reinstate your tax-exempt status with the IRS. Please see the following PTA websites that include prefilled templates, FAQs, IRS links and webinars:[State PTA Website Link] or taxhelp Feel free to contact the [State PTA] Office for assistance if you need additional help. [State PTA] leaders look forward to continuing working together with your PTA as part of the oldest and largest volunteer child advocacy association in the nation.We hope that you find these resources helpful. Please note that if you choose not to go through the steps to reinstate your 501(c)(3) status, your parent group will:Be required to pay taxes on proceeds from all fundraisersNo longer be able to collect tax deductible contributionsNo longer operate as a PTANo longer have access to PTA resources and benefitsBe required to submit all PTA funds to [State PTA] or other like 501(c)(3)[State PTA] will contact the IRS to inform them that your PTA has dissolved and is no longer doing business as a non-profit organization.Sincerely, MACROBUTTON DoFieldClick [Your Name]President, [State PTA]EXHIBIT 2REMINDER – Form 990 filing is due to the IRS by November 15 for PTAs with a June 30 fiscal year end!ALL PTAs must file a Form 990 per the IRS. Below is a table to determine what type of 990 your PTA should file and resources to help you prepare it:IRS Form990 N990-EZ990Gross Receipts< $50,000>$50,000 but < $200,000> $200,000Total AssetsNA< $500,000and/or >$500,000Time Commitment1-2 minutes1-2 hoursHire a CPALinks to Formsepostcard. pub/irs-pdf/f990ez.pdf pub/irs-pdf/f990.pdf Links to IRS Instructionspub/irs-pdf/i990ez.pdf pub/irs-pdf/i990ez.pdf pub/irs-pdf/i990.pdf Links to PTA InstructionstaxhelptaxhelpPTA recommends engaging a CPA knowledgeable in nonprofit organizations ................
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