This section of the Guidelines provides detailed information related to establishing an organization and applying for exemptions. Some blank forms and examples of completed forms and other information are included in the Exhibits to assist you in completing the steps.
- Before proceeding with the steps of forming an organization, please obtain written approval from the School Principal or Administrator by completing and submitting the Parent Organization Registration & Approval Form.
- Establish the Organization's mailing address. (You will have to list an official mailing address on several state and federal forms when creating your identity as a Parent Organization; therefore, it is better to get this step done first.) The IRS and the Texas State Comptroller's Office recommend that each Organization obtain a post office box (PO Box) or private mailing box (PMB) to use as the official mailing address of the Organization. The address and box keys can be given easily to the new officers at the beginning of each year.
Please understand the importance of maintaining a consistent mailing address for the Organization. First, you will save time since you will not have to update your address each year to the District, State Comptroller's Office, Texas Secretary of State, the IRS, and your bank as you would if you used someone's home address.
Second, Parent Organizations receive several important documents from these agencies throughout the year, and if the address changes frequently, some of these documents could be lost or misplaced. If the related school's address is used as the Organization's official address, the Organization should be aware that they may not receive mail in a timely manner when the school is closed (i.e., summer vacation, and some holidays). The IRS mails forms and other correspondence to Organizations periodically. If these forms are not completed and returned to the IRS within a specific time period, an Organization could lose their tax-exempt status, thereby also losing their limited tax-exemption with the State of Texas and possibly face fines and penalties.
The District does not recommend using a home address since officers change frequently.
- Decide if your references to Parent Organization will be an association or a corporation and prepare the necessary organizing document.
An association will prepare and sign an “Articles of Association” as an organizing document; however, this document will not be filed with the Texas Secretary of State. The date the final document is signed by at least two officers or board members is considered the beginning date of the organization. Please see a sample of Articles of Association in the Exhibits.
A corporation will prepare and sign Form 202 (Certificate of Formation Nonprofit Corporation) to be filed with the Texas Secretary of State. You should receive a copy of your certificate of formation from the Texas Secretary of State stamped with the date considered the beginning date the organization. Please see a sample of Articles of Incorporation in the Exhibits.
Both the IRS and State of Texas require that each Parent Organization have an organizing document to establish the official formation of the organization. You will submit this document along with the appropriate forms when applying for federal tax exemption as a public 501(c)(3) organization and when applying for state sales, use, and franchise tax exemptions.
Benefits of Incorporation:
- Formalize organization and provide standardized operating procedures through Articles of Incorporation and Bylaws.
- Helps shield the individuals governing and operating the nonprofit organization from liabilities incurred by the organization, unless the individuals are negligent in their duties.
If an association, skip to Step 5. If a corporation, go to Step 4.
- For a corporation, file for incorporation with the Texas Secretary of State before proceeding with Step 4. (See Incorporation of a Non-Profit Organization for more information.)
- Draft the Parent Organization 's bylaws as soon as possible. Please see a sample Bylaws of an Association and Bylaws of a Corporation in the Exhibits.
- A membership drive should occur to let parents know about the Parent Organization and when the first membership meeting will be held. At the first meeting, have the general membership approve establishing the Parent Organization and the Parent Organization bylaws. Then elect officers in accordance with the bylaws.
For the following Federal requirements, please see Federal Regulatory Information for more details.)
- Apply for an Employer Identification Number (EIN) with the IRS. To obtain an EIN, click here.
- After receiving an EIN and electing officers, the Parent Organization can open a bank account.
Read "Top Ten Reasons for Delays in Processing Exempt Organization Applications" before you submit your application!!
- Apply for federal tax-exemption as a public 501(c)(3) organization with the IRS.
- Receive a Letter of Acknowledgement from the IRS indicating receipt of your application and payment.
- Correspond with the IRS if your bylaws need to be modified or if the IRS needs additional information to complete your approval process.
- Receive a Determination Letter (approximately 4-6 months later) stating you are a public 501(c)(3) tax-exempt organization.
- Send a copy of the Determination Letter to the Internal & Systems Control Department.
For more information, the IRS website is a great resource. Please see Life Cycle of a Public Charity for more information on what is available on that IRS webpage.
For the following State requirements, please refer to State Regulatory Information for more details:
- Apply for an exemption from Texas sales, excise, and use tax with the Texas Comptroller's Office.
- If you are incorporated, file for franchise tax-exemption with the Texas Comptroller's Office.
- Apply for a Sales Tax Permit with the Texas State Comptroller's Office.
- Put all of the documents related to these steps in a "Permanent File" in a safe place to be forwarded to the new officers each year. You may also scan these documents and save to a flashdrive. Make copies for several officers.
Please refer to the checklist for requirements pertaining to existing Parent Organizations.