Nonprofit Officer Duties and Requirements Guide

1. You are an officer – NOW WHAT ?? Booster ClubsPTAClass of 2009

2. Three Primary Responsibilities • Pay close attention to what’s going on and make decisions based on good information.

3. Three Primary Responsibilities • Put the welfare of the organization above other interests when making decisions.

4. Three Primary Responsibilities • Act in accordance with the mission and goals of the nonprofit organization.

5. Steps to secure nonprofit status • A purpose • A name • Officers • Form of organization • Governing documents

6. Form of organization • Nonprofit association • Nonprofit corporation Seek competent legal advice to make this decision.

7. Governing Documents • Nonprofit association • Nonprofit corporation • Articles of incorporation • Bylaws Seek competent legal advice.

8. Steps to secure nonprofit status • Federal Tax Identification Number • IRS Application for exemption • State Application for exemption • Sales tax permit

9. Federal Tax Id Number • Form SS – 4 • www.IRS.gov • Can be filed • Online • Telephone • Fax • Mail

10. IRS Application for exemption • Form 1023 • within 27 months • Filing fee • $300 if <$10,000 • $750 if >$10,000 • Publication 557 • Seek competent tax advice

11. IRS Application for exemption • Public disclosure requirements • Form 1023, and • All supporting documents • Any letter or document issued by the IRS with regard to the application

12. IRS Application for exemption • Already exempt and need a verification letter? • (877) 829-5500 or write to Internal Revenue ServiceEO Customer Account Services P.O. Box 2508Cincinnati, OH 45201

13. Texas Application for exemption • PTA • No application form

14. Texas Application for exemption • PTA • Affiliated with state association? • Yes – Send • Letter from state association acknowledging affiliation • Cover letter requesting exemption

15. Texas Application for exemption • PTA • Affiliated with state association? • NO – Send • Cover letter requesting exemption • Statement of operation as NPO • Schedule of activities

16. Texas Application for exemption • Other PTOs • No application form • Send • Cover letter requesting exemption • Statement of operation as NPO • Schedule of activities

17. Texas Application for exemption • Booster Clubs • First - MUST have federal tax exemption • Then - submit AP-204 with copy of federal determination letter • Additional documentation listed on AP-204

18. Sales Tax Rules • Texas Administrative Code • Title 34: PUBLIC FINANCE • Part 1: COMPTROLLER OF PUBLIC ACCOUNTS • Chapter 3: TAX ADMINISTRATION • Subchapter O: STATE SALES AND USE TAX

19. Sales Tax Rules • Rule § 3.322 • Exempt from sales and use tax on purchases for the organization’s own use

20. Sales Tax Rules • Rule § 3.316 • NOT exempt from collection and remittance of sales tax on items sold

21. Exceptions: Rule §3.316 • Meals and food products • Annual banquets or suppers NOT professionally catered • Amusement services • Membership dues • Publications

22. Exceptions: Rule §3.316 • Auctions, Rummage Sales and Other Fund Raisers: • Exempts occasional sales by persons not in the business of selling, leasing or renting

23. Exceptions: Rule §3.316 • Auctions, Rummage Sales and Other Fund Raisers: • Allows for two (2) ONE DAY sales during any 12 month period • One day sale is literally 24 hours. • A two day sale uses both of the allowed annual one day sales.

24. Exceptions: Rule §3.316 • Fund raiser in which items are sold over a period of several days or weeks • Exempt if there is ONE collection date for turning money in. • Qualifies as one of the two allowed annual one day sales.

25. Exceptions: Rule §3.316 • VERY IMPORTANT that there only be one collection date for turning the money in or the entire fund raiser becomes subject to sales tax!

26. Sales Tax Rules • Already exempt and need a verification letter? • Exempt Organization Search: http://window.state.tx.us/taxinfo/exempt/xmptsearch.html • Request for Verification online: http://www.window.state.tx.us/taxinfo/exempt/xmpt_ltr_req.html

27. Sales Tax Rules • Application for Resale Certificate • AP-201 • http://window.state.tx.us/taxinfo/taxforms/ap-201.pdf

28. Annual Federal Reporting • Form 990-EZ or Form 990 • Not required if annual GROSS RECIEPTS < $25,000 • If filed, must be available for public inspection

29. Form 990-EZ • Annual Gross receipts <$100,000 AND • Total assets <$250,000 • Seek competent tax advice

30. Form 990 • Annual Gross receipts >$100,000 OR • Total assets >$250,000 • Seek competent tax advice

31. Form 990-T • Annual Gross income from unrelated trade or business >$1,000 • Seek competent tax advice

32. Loss of Exemption • Public disclosure requirements • Form 1023 • Form 990-EZ, 990, 990-T • Can charge for copies • $1 for 1st page • .15 for each additional page

33. Loss of Exemption • Political activity • Excess benefit • Private inurement • Intermediate sanctions

34. Loss of Exemption • Prevention: • Adequate books and records • Policies and procedures • Continuing accountant or lawyer

35. Accounting • Adequate books and records • Board meeting minutes • Check register • Reconciled bank statements • Income records

36. Chart of Accounts • Assets – what you own • Liabilities – what you owe • Fund Balance – what’s left • Income • Expenses

37. Policies and Procedures • Internal controls • Board meetings & minutes • Reporting requirements • Separation of duties • Training of new officers • Continuing accountant or lawyer

38. Software • When do I need it? • Reporting • 990 • Recommendations • QuickBooks