Committee members: Richard Godke – firstname.lastname@example.org
Delores Appleby – Parliamentarian@dccpta.org
Cathy Guiler – Parliamentarian@dccpta.org
Mindy Eisman – Health-Safety@dccpta.org
Revised Date 10-15-2016
The DCCPTA Board appointed a committee to address the question. “Can a local PTA, in accordance with IRS regulation, recognize a sponsor by posting a link back to their website?”
Disclaimer: No one on this committee is a lawyer or a tax professional and your PTA should consider this document as information only, not professional legal or financial advice.
According to Jean Hovey, Florida PTA Executive Director, “The safe way is to “Thank” the sponsor/business, not include a direct link to their business.” After extensive research it was found both the Florida PTA and the National PTA recognize sponsors by posting a link back to their website. It was also found that not for profit support organizations, law groups, and accounting firms believe that recognizing a sponsor by posting a link back to their website is not advertising and is legal according to their interoperation of the IRS code (SEE LINK).
So what does my PTA do?
- If a local PTA wants to avoid any questions regarding IRS interpretation. If they believe the sponsor links are considered advertising, they should not publish a sponsor link back to their website.
- If your local PTA uses less than the $1,000.00 per year limit for Unrelated Business Income (UBI), you can consider the link as (UBI) advertising and still avoid an IRS tax on that income.
- If a PTA interpret the IRS law that a sponsor link is not advertising (SEE LINK). And you chooses to post the sponsor’s link, then your PTA should: Use a software disclaimer that explains you are leaving the PTA website and your PTA is not responsible for anything on their website (see ATTACHMENT 1). 2. Local PTA units should have a signed Sponsor Agreement clarifying the agreement. (see ATTACHMENT 2)
What are the IRS penalties if they recognize a sponsor by posting a link back to their website as advertising? The committee could not find any PTAs that has been cited for advertising with supporter link backs. So no examples can be sited. From IRS dealing with tax code violations, they would charge you for: the tax as an advertisement, interest on the amount of money not paid, and a penalty. LINK HERE for more IRS information.
LINK HERE for full committee report.
Each Local PTA will need to make their own decisions on weather recognizing a sponsor by posting a link back to their website is worth the risk.