Parent Booster USA today kicked off its “Get Legal, Stay Legal” campaign with the release of a brief video. The campaign emphasizes Parent Booster USA’s mission of helping school support organizations come into and remain in compliance with federal and state law.
According to Parent Booster USA, a national umbrella organization for PTO s and other school support groups, of the estimated 100,000+ booster clubs in the country, less than 10% appear to be registered with the IRS as tax-exempt organizations.
According to the U.S. Department of Education’s National Center for Education Statistics, there were 98,793 public K-12 schools in the United States in 2007. There are an additional 35,000+ private K-12 schools. Most of these schools have at least one PTO or other booster club raising funds for the school. Many schools have a half-dozen or more booster clubs including PTOs, band, choir, football, baseball, cheerleading, and other academic, sports and arts-related groups. Yet, a search of IRS records found less than 9000 school “booster” organizations listed as tax-exempt charities.
“All school booster clubs that raise $5000 or more a year are required to file a tax return with the IRS,” stated Sandra Englund, founder of Parent Booster USA.“ It used to be that if a nonprofit raised less than $25,000/year it did not need to file an annual tax or information return. That’s not so anymore. If school booster clubs are not recognized as tax-exempt, they may be required to file and pay corporate income tax on the funds they raise.“
“It appears to us that a large percentage of school support organizations are unaware of IRS rules, and are therefore out-of-compliance,” stated Englund. The “Get Legal” part of Parent Booster USA’s campaign emphasizes educating booster groups on federal and state tax requirements.
The “Stay Legal” aspect of the campaign emphasizes budget development, financial management and compliance with federal and state reporting requirements. With IRS scrutiny of small nonprofit organizations increasing, it is more important than ever for booster groups to file their annual IRS Form 990 information returns timely. Similar reporting requirements exist at the state level. In Texas, for example, booster groups should be filing annual sales tax reports with the comptroller’s office and periodic reports with the secretary of state.
Although many booster club officials start off unaware of the regulatory requirements associated with raising money for their supported activity, with the help of Parent Booster USA, Inc. they will be able to Get Legal and Stay Legal.