Is this a gift or compensation to a homeschool leader?


I just purchased your e-book, Paying Workers in an Homeschool Organization.   It only briefly touched upon the issue I am most interested in, and I am wondering if you have additional resources to answer my question.

Our Steering Committee decided years ago to provide certain gifts and perks to our chairman whom they were in danger of loosing due to her family suffering financially at the time.   The financial hardship has passed, but the gifts and perks remain. Currently, our chairman receives these annual benefits:

  1. $1,000 in gift cards (usually grocery and gas gift cards)
  2. $700 in classes for her children – these are the fees paid directly to the independent contractor teachers
  3. $100 -200 in waived registration fees (These are fees that the co-op charges members.)
  4. $160 in free pizza/drinks/snacks
  5. reimbursements for costumes and drama-related costs for her children (all other members pay for these)
  6. $300-$500 in cash gifts collected from members and given directly to the chairman.

She is the only one to receive gifts and perks out of the co-op budget.

This has been a very difficult conversation at our co-op because our chairman does do an enormous amount of work.

Thank you!

Anne in PA



When I read the list of “perks” your chairman receives I was shocked! Wow!

Most board members are happy with flowers or a small gift card.

According to the IRS,  an officer who is paid is an employee. That means the gift cards, tuition discounts, and cash she received should have been reported to her on a W-2 and your group was supposed to pay employer taxes (SS/Medicare) on her “wages” and file quarterly tax forms with the IRS!

When you pay independent contractor teachers on her behalf, you are paying her personal expenses. The IRS considers payment of personal expenses as taxable compensation and it needs to be reported on a W-2. See

My recommendation is to stop these excessive payments immediately. The IRS calls this “excess benefits” and can impose penalties and a 25% tax on what they deem “excessive.”

Here’s an excellent article on excessive benefits (they consider paying personal expenses for members of an officer’s family to be “excessive.”)

Here’s what they recommend:

If your nonprofit discovers an excess benefit transaction with a DP (disqualified person; i.e. , an insider or leader), it should make good faith efforts to correct it. To do this, you must have the disqualified person repay or return the excess benefit, plus interest, and then adopt measures to make sure the same situation doesn’t occur again. The IRS will take into account these efforts in deciding what penalties to impose and especially whether to revoke the nonprofit’s tax exemption. (emphasis added)

You can, of course, start paying her a salary that she will report as taxable income to the IRS. My new book Paying Workers in a Homeschool Organization can help with that!

Carol Topp, CPA


Paying Workers in a Homeschool Organization-2nd edition

$9.95 paperback
130 pages
Copyright 2017
ISBN 978-0-9909579-3-5




Facebook party for homeschool leaders!

I’m looking forward to joining homeschool leaders in Williamsburg, VA for the Home Educators Association of Virginia Leadership Conference March 13-14, 2015.

But first I get to meet these leaders online at a Facebook Party!

What: Facebook Party for Virginia homeschool leaders

Who:  The sponsor is Home Educator Association of Virginia

When: Tuesday, January 27, 2015 at 8-9 p.m. ET


At the Facebook Party I will share about the topics I will discuss at the Leadership Conference

Homeschool Leadership is Like Marriage—Know What You’re Getting Into!

Who’s Afraid of the Big, Bad IRS? How the IRS Sees Homeschool Organizations

Top(p) Ten Tips for Running a Homeschool Organization

There will also be time for questions from leaders.

See you on Facebook and maybe in Williamsburg, too!

Carol Topp, CPA

Experienced Homeschoolers Offer Advice (podcast)

Carol Topp recently interviewed experienced homeschoolers at the HSLDA National Homeschool Leaders Conference. Listen to Carol’s lastest podcast as the leaders discussed:

  • Why they became a homeschool leader
  • What they wish they had known
  • What advice they have to offer you

Listen to the podcast

(I apologize for some of the poor audio! I’m improving, but I’m still learning about recording with lively background noise)


If you find this podcast helpful, please share it (below!) and leave a review on iTunes. (click on “View in iTunes” to leave a review)

How to leave a review on iTunes

Thank you!

Carol Topp, CPA

HomeschoolCPA Carol Topp at 2014 HSLDA National Conference


Homeschool School Legal Defense Fund Association (HSLDA) 2014 National Leader Conference will be held in my backyard. Well, not in my real backyard, but awfully close!

The 2014 Conference will be held in Erlanger, Kentucky, only about 30 minutes from my home.

Register here

I am honored that they have invited me as one of their speakers. I will be speaking to homeschool leaders from across the country on:

Who’s Afraid of the Big, Bad IRS? How the IRS Sees Homeschool Organizations


Tax Exempt Status for Homeschool Organizations: The Pros and Cons 


I hope to meet some of you there! If you cannot attend be sure to tell your state representative to attend one of my sessions and take good notes for you!

Carol Topp, CPA

Pinterest board helps homeschool leaders

HomeschoolCPA has a Pinterest board called Helps for Homeschool Leaders.


On it you’ll find links to

  • blog posts to help you lead your homeschool organizations’
  • podcasts for homeschool leaders
  • inspiring quotes
  • other pins you might find useful.

Check it out, follow me on Pinterest and pin something to your boards too.

What can you do when your leader is overly-controlling?


Does your homeschool group suffer from a dominate leader? She may have founders syndrome.

What can you do when your leader is overly-controlling? offers this advice for boards:

  1. Understand and take full responsibility for the role of board member. Insist on focused board training to review the roles and responsibilities of a governing board. Undertake a yearly self-evaluation of the board to ensure it is operating effectively.
  2. Once a year, conduct a key exercise: pretend the founder suddenly left the organization. Who will/can quickly step in? Are you sure? What activities are the staff really doing to carry out programs? In the case of non-profits, what grants does the organization have to perform against and report on when? What is the cash flow situation? What stakeholders must be contacted? Where are the files/records?

I really like the idea of pretending your key leader suddenly left. It’s a great idea!

The blog post from offers other terrific suggestions for boards facing a founder who won’t let go.

Author Stephen G. Donshik in an article “The Creator or the Destroyer: Dealing with Founder’s Syndrome”  says it can take a long time, many months, to get a founder to loosen the reins.
It might require many discussions between the parties; it may take months before the founder acknowledges the need for a change in leadership.
What should you do if the founder won’t let go of leadership? Mr Donshik advises,
At some point if the founder is not receptive to planning for a succession of leadership in the organization, the board of directors may have to make a difficult decision to remove the founder from her leadership position when her continuing in the role is destructive to the agency.

I hope your organization will deal with founders syndrome and come out stronger and continue to serve more homeschool families.

Carol Topp, CPA

How to change the responsible party name on your EIN


A Balarman from Free Digital Photos

From Elaine’s Tax Tips for Nonprofits

New IRS Form 8822-B Requires Action By Virtually All Organizations

In an effort to update its records, the IRS is requiring any organization or entity that obtains an employer identification number (EIN) to report to the IRS a change in the “responsible party” within 60 days of that change.  This change is reported using Form 8822-B, Change of Address or Responsible Party – Business.  This is a good thing as it helps to provide assurance that critical communications from the IRS will not be directed to a person who is no longer associated with an entity.  However, in its efforts to update contact information, the IRS is requiring virtually every entity to provide current information.

Who is a “Responsible Party”
Currently the application for an EIN requests the name and identifying number of the “responsible party”.  This is defined to be as the person who has a level of control over, or entitlement to, the funds or assets in the entity and the disposition of its funds and assets.  This is a fairly general definition and may actually apply to multiple people within an entity.  However, when applying for the EIN, an entity is only required to list one responsible party.  In essence, this is listed as the primary contact for the entity and provides assurance that mail sent from the IRS will be directed to someone with enough authority to deal with the issue at hand.

Why does this affect so many entities?
The complication enters the picture with the direction from the IRS that if the “responsible party” has changed prior to 2014, then the entity must file the Form 8822-B no later than March 1, 2014.  Prior to January 2010, the term “responsible party” did not exist.  Therefore, it can be presumed that if an entity obtained its EIN prior to January 2010, it should file the Form 8822-B by March 1, 2014 to declare its “responsible party”.    If an entity gained its EIN after January 2010, then it should check its application to see who was listed as the “responsible party” to determine if the filing is required.  For the future, entities should understand that the “responsible party” must be updated in the event the listed party leaves the entity.

Get  Form 8822-B here

From Carol Topp, Homeschool CPA: Homeschool leaders may be concerned about including their name and SSN on the EIN application. Until recently, a nonprofit leader had to call and write a letter to the IRS to get their name removed from an organizations EIN. I’m glad to see the IRS now has a simple form to fill out.

Carol Topp, CPA

What to do about homeschool co-op drop outs


There was a discussion on the Facebook group  I Am a Homeschool Group Leader on co-op drop outs. Lots of leaders shared advice.

How do you handle teachers/parents leaving our homeschool co-op mid-session? We have had a few drop outs and it causes serious stress and scrambling for me. We are free except supply fees, but all parents are required to teach or assist (in a class of their choosing). I am almost thinking we need a ‘punishment’ in place for dropping out.
I don’t know what to do right now. I hate to charge fees but I’m thinking now that is why a lot of co-op’s do…….you value something more if you pay for it.


Amanda says: We have a similar problem with folks registering for free field trips and not showing up, which often upsets the staff of the field trip location. We have decided to charge $10 per family for the free field trips and refund it 100% to every family who actually attends. If someone does not attend, their money will be donated to a local charity. Perhaps some variation of this approach might work for your situation.

Georgi says: We now have a teacher agreement that teachers have to sign when they decide to teach, indicating their commitment for the entire year. We still have had a few leave, but I think it has helped people really think through their decisions before making that commitment. We try to spell it out so people realize how much of an affect it has on everyone in the group. If someone does have to leave for some reason, the teacher has to contact each parent and refund their money even if she’s purchased supplies. We have had one person leave mid-year, but fortunately, another mom was willing to pick up the class. The teacher was required to give the new teacher half the class fees.

We allow each teacher to charge their own fee for classes, and recommend that each charge at least $1.00 a class. This helps parents not flake out and not attend classes. It’s hard to have some classes (like gym) if parents don’t bother to show up. We found that charging even a little cut down on that. Your last thought is exactly right – you value something more if you have to pay for it. We also are not a drop off – parents have to volunteer, and the amount of time depends on how long they are there. Usually 2-3 hours if they are there all day. Oh, and each family takes a turn cleaning the church at the end of the day (4 weeks a year).

I’m sorry you are so discouraged, but I understand and have been there. And remember – you can’t be all things to all people, and you can’t teach everything. If others don’t step up to fill in the openings, those classes might have to be dropped. I guarantee people will be more apt to teach next year if they have to do without this year. Doesn’t make this year easier, though. Hang in there!

Melissa says: We charge a $10 per student non-refundable fee. This covers insurance and any other “general” expenses for our Class Day. Then, we charge class fees according to what the teacher needs for the individual classes. We have had a few that ended up moving mid session. We live in a military town, but we usually have someone else take over the class. I think the suggestion for an agreement for the teacher to sign might be a good idea for you guys till you get the point across over the next couple of sessions that if you sign up to teach, you better stay! You can see our documents for how we operate our classes here: It actually has all of our rules and everything if you keep scrolling through the applications. Maybe there will be something of help to you in there.

Roseanne says: We have a put a commitment fee of $100 in place. If the member does all she is required, she can get it back at the end of the year or roll it over into next year. We also have a family or individual member fee and some classes have an extra class supplies/book fee as well. Please know that these growing pains will work out.

We interview new families wanting to join our co-op so we can get to know them and they us. We also make sure they are fully aware of their responsibilities during the interview process. After we accept them (we’ve only had to “reject” 1-2 families but allowed them as individuals), they can choose to come or not.
Also we have a mandatory business meeting the Thurs. evening before our first week of class. We go over all the things that everyone should already know and any new policies that the board has put in place. The more we put things in front of members, the better our days go.

Our general rule of thumb for the new members is to staff our nursery/preschool/kdg. areas so they can take the first year to get used to the way our co-op runs before they teach a class. There have been the rare exceptions.
We charge a late fee for being late to a first period class three times in a row. Some families pay these on a regular basis.

Jennifer says: This wouldn’t apply if you’re brand new (we were two years ago) but we like for our members to be active in the Co-op for at least a semester before offering to teach. With some, I can tell they are committed. With others, I have had to gently tell them to hold off on teaching. You can usually tell after one semester how a family will be about commitment, being on time (don’t get me started), not staying home “just because”, etc. If you’re brand new, it’s a different story. We were begging for teachers at the first meeting and thought we wouldn’t get enough. It has always worked our somehow. Some do back out before sign- ups, but I’d much rather they do it then than mid semester, and give us time to get a replacement class. We don’t have a signed commitment, but our teachers know they are committing for the semester.

Isn’t that great advice? If you’d like advice like this, you can join us at I Am a Homeschool Group Leader on Facebook.

Carol Topp, CPA


Three questions to ask graduated homeschool moms

Janice Campbell

My friend and blogger Janice Campbell recommends current homeschool moms ask graduated homeschool moms these three questions:

  1. What is the most delightful memory you have of homeschooling?
  2. What was the worst mistake you made when homeschooling?
  3. What do you wish you had known while you were homeschooling?

I’m a graduated homeschool mom. After 14 years of homeschooling, both of my daughters are now in college.
I stay a member of my local homeschool network and my support group leader, Chrissy, asked me to come to their kick-off dinner in a few weeks and share my experiences with current homeschool moms.

I’m going to do that and I hope someone there asks me these three questions! I have my answers all prepared. 🙂

Tip to support group leaders: if you want us graduated homeschool moms to stay involved, do what Chrissy did. She invited me to come on a specific night. Otherwise, I don’t feel like I fit in anymore.
I also think a panel of graduated homeschool moms answering the 3 questions would be a neat idea for a support group meeting.

Carol Topp


Homeschool Co-ops (the book) helping reduce leader workload

Sarah Andrews  did a nice review of my book Homeschool Co-ops: How to Start Them, Run Them and Not Burn Out at the The Home Educating Family Association website.


“an excellent resource for co-op leadership”

“anticipates and discusses most issues one might encounter while leading a co-op”

“wise and insightful”

“Topp’s advice could save a lot of mental energy and stress.”

“Our co-op was able to implement some of Topp’s suggestions in Homeschool Co-ops, and our leadership and teachers have seen an improvement from last year in our workload.


– See more at:

Homeschool Co-ops
Learn more about the book, read a sample chapter here.
Available in print $12.50
Electronic version as a pdf  file $10.00
Coming soon: Kindle format!


Thank you, Sarah, for your wonderful comments! I’m so glad the book helped your leaders reduce their stress and workload!
Carol Topp