How the IRS defines a school

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I’ve found your website very helpful.  We are working on starting a “school” which will initially offer a 3 to 5-day program for 5-10 year olds who are being homeshooled.  We would like to obtain 501c3 status.  My understanding is we can call ourselves a school, but I’m wondering if homeschooling needs to be mentioned in the 1023 application or if it just causes complications.  Is it simpler to state that we offer 3 and 5 day programs for educational enrichment for kids aged 5-10 and leave it to the parents to address the homeschooling issue?  They notify the state they are homeschooling and follow the state regs on that.  We are located in Maine.  Thanks for any guidance, thoughts, or advice.

Chris in Maine

 

Chris,

I have helped over 75 homeschool organizations receive tax exempt status. I’ve had no difficulty using the word “homeschool” in the IRS application. I usually state that all families are legally homeschooling in their respective states.

You could call yourself a school, but the IRS has a pretty narrow definition of “school” and there is an additional form to fill out when applying for tax exempt status (Form 1023 Schedule B). Schools are ineligible to use the new, shorter Form 1023-EZ, as well.

The Form 1023 Schedule B requests information on your curriculum (list of courses, dates and times) and “evidence” that your teachers are “qualified” meaning state certifications or required training. They also request records of regular attendance, racial makeup of your student body, and a lease or deed, proving you have a regular place to meet. Take a look here http://www.irs.gov/pub/irs-pdf/i1023.pdf and scroll way down to page 17.

Most homeschool groups that use volunteer parents and vary the classes offered each year do not fit this IRS definition of  a school.

So they do not call themselves a school. They call themselves an “educational organization” or sometimes an “educational enrichment service.”

You asked if  “Is it simpler to state that we offer 3 and 5 day programs for educational enrichment for kids aged 5-10 and leave it to the parents to address the homeschooling issue?”
Well, as I said, I explain to the IRS that the program is for homeschooled students and, yes, the parents are responsible to be sure they are legally homeschooling.

I will review the Form 1023 application for 501c3 tax exempt status for organizations that prefer to fill out the application themselves. See details here: http://homeschoolcpa.com/services/501c3-tax-exempt-status/

 

IRS and Your Homeschool Org cover

My book The IRS and Your Homeschool Organization
explains the pros and cons of 501c3 status and offers tips to get through the application process quickly.

Carol Topp, CPA

 

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