A critical element in your Board’s due diligence is keeping abreast of tax law as they relate to your school’s tax-exempt status. Most of the compliance requirements (e.g., record keeping, accounting functions financial statements) are handled at the school level, primarily in the Business Office and Development Office. However, the Board must also be acquainted with the rules concerning disclosure, conflict of interest, and other areas where your school may be at risk of losing its tax-exempt status.
The Internal Revenue Service has many publications to help nonprofits understand the tax laws conferring tax-exempt status, but the chief publication that provides an overview of compliance concerns is the Compliance Guide for 501(c)(3) Public Charities (IRS Publication 4221-PC). This concise, easy-to-use brochure contains the primary information with which Board members should be familiar. The brochure also provides references to other IRS publications and forms, as well as telephone numbers should your school need specific help on more complex issues.
To download a PDF copy of the IRS publication, click here.
