Tricia, a treasurer of a homeschool program in Texas asked questions about adding a football program. The homeschool group has 501(c)(3) status with the IRS.
She had several questions about tax exempt status and financial oversight.
- What steps with the IRS do we need to follow to bring them under our homeschool group’s tax exempt umbrella?
- What forms would we need to file?
- Would they share our tax ID number or would they need their own?
- They would handle their own bank account, but how much would we need to manage?
I read your 501(c)(3) tax exempt application given to the IRS and see that sports teams was part of your mission. That’s good, because you do not have to approach the IRS and ask for permission to add the football program; it was included in your original tax exempt application.
Here are my answers to your questions:
1. When you file your 990 or 990-EZ Annual Information Return with the IRS, you list the football program as one of your programs. If your gross revenues are under $50,000 per year, you’ll file the simple Form 990-N and no explanation is required.
2. There are no additional forms to file beyond the annual Form 990/990-EZ or 990-N. That’s because sports teams was part of your mission in your original tax exempt application.
3. Use your main group’s EIN (tax ID number). The football program is just another activity run by the main group, so you should expect the typical concerns such as: Are they following policies, being careful, keeping good financial records and practices, etc?
4. Your main organization should have oversight of the football program’s bank balances. This includes allowing you, as the main group’s treasurer, access to their bank account online and require they give you a monthly bank reconciliation report and monthly reports of the income and expenses.
This may be a lot of extra work for you as a volunteer treasurer, so you may need to hire a bookkeeper or recruit more help from volunteers.
Money Management in a Homeschool Organization explains how to create a budget, monitor it, and inform your board of the financial health of your organization with clear, easy-to-understand financial reports. Specifically written for treasurers of homeschool organizations.
Carol Topp, CPA