Look at the last 25 years. The growth of home schooling is staggering.
One family at a time enters. Each year tens of thousands in this country and around the world begin
this delightful and difficult journey.
- Safety for their children
- A better educational opportunity, using the tried and true tutorial
method of teaching
- What your children believe to be right and wrong will be established during
their formational early years
For many reasons, their own reasons, families come flooding into home
Because of the flood, home education is big business. Running home school
groups that serve home schoolers is big business. Yes, they are normally tax exempt businesses, but they are
Think and act like you're running a business -
- Find tax breaks for your member families
- Comply with tax laws, IRS and state
- Save money for your group, where you can do it legally
- Solicit donations properly
- Do you know how to use your tax exempt status to the best
- Are the support groups in your area capturing part of your tax advantaged
position? Why not?
- Do you stay up to date with changes in Federal and state tax
- Are your organizational records in order? Are they ready to be passed
to your organization's next President and Treasurer?
- Are you exposing yourself and your fellow board members to undue
I want to tell you my story as a home schooling father willing to be in
leadership, a leader surprised by having been drawn into running a regular business that just kept
I see a path to huge growth in home education that can be of significant benefit
to individual families and the groups they have formed on their home school journeys. We all come from many
different locations for many reasons, but all businesses have common denominators, even homeschool groups'
Dollars and organizational structure are common to all businesses, including tax
exempt businesses. Tax collectors know this. Build your organization and handle your dollars
correctly. Be above reproach.
Home schooling continues to grow. More and more families want to start home
schooling. Be prepared.
Historically, the leaders of the homeschool movement have been veteran
homeschooling families, families willing to help other families get started. This model has worked for the last 25 years or so, but new pressures arise on the organizations
caused by some of the factors of growth.
Hi, my name is Claiborne Thornton. In 1984 I was elected
President of the Tennessee Home Education Association and have served in that
capacity since then. My wife Lana and I have had so many opportunities and been blessed so many times, it is
hardly imaginable. We know some of the most wonderful people in the country and around the
I could tell a million stories, but let me just do a heart check. We started
home schooling because we thought that having a chance to train our children was too good to pass up. We had
soaked up Dr. Francis Schaeffer's books, his audio lectures, and we got to hear he and his wife Edith on more than
one occasion. They and many others taught us a comprehensive view of the Bible, of God and of
Worldview was something we grasped.
Home education offered us a way to impact the way our children saw the
world. For Lana and me that was the fertile ground on which the seed of home schooling was
That sowing took place in 1980 and again 1981 on Dr. James Dobson's radio program
when in July of both years he hosted Dr. Raymond Moore. We researched and counseled with friends and church
members for a year launching our home school in August 1981. We did not pass the teaching responsibility
to another person.
In 2009 we're still at it. We like it and think you will,
God is good.
After TN's home schooling law was signed in May 1985, I asked God to please give
home educating families 15 years of peace to see if home education really worked. He gives so much more than
we ask or think.
Lord, please let us try this experiment in freedom with parents assuming their
proper role as they apply "Fathers train your children when you rise up, when you lie down and when you walk in the
way" from Deuteronomy 6.
Home schooling is hard work, but people flocked to it. They wanted to
Hope for a better future is a most powerful motivator, especially a hope for your
In the early years 30% net growth happened for probably ten years. People
flooded in. Many did not last. Many more wanted to try. The decade of unsustainable growth nearly
swept us away with the flood of people. There were and are today so many people wanting, actively seeking,
help, sometimes desperately.
Today growth has tapered off to 5% to 7% per year. With compound growth and
a community of probably 60,000 Tennessee home schoolers that still means we're adding between 3,000 and 5,000
home schoolers in TN per year.
That's a lot of people. I grew up in Brownsville, TN that had about
5,000 people in it in the 1960's, so adding a new town about that size every year is huge growth.
In the early years, if you saw a home school family at the store, you could just
tell they were home schooling. 90% plus of them were epistemologically self-conscious
Christian people and openly displayed a love and an openness with each other and those around
Today home schooling families look much more like the general culture and that's
good. It does present some wonderful opportunities disguised as problems, like these.
- The shear number of home schoolers
- The number of world views of home schoolers
- The number of services marketed to home schooling families and associated
- The range of maturity and level of discernment of homeschooling
- The number of reasons people chose to home school
- The financial pressures on all
families, especially those who chose a one income family
- These factors combine increasing the pressure on homeschool leaders raising
Is leading home schoolers getting easier or more complex?
Has your organization expanded the services offered to homeschooling
Do you hear and feel the question, "What have you done for me
Please be aware. If you are running a 501c3 home school organization, you
are running a not for profit business. It is a business and is to be run like
Can you show homeschooling families how they can save money as they buy their
Is your organization structured to minimize the personal liability of your
officers and board members?
Is insurance part of what is important to your organization and the services it
Has your 501c3 changed its bylaws to comply with the new IRS requirements
beginning in 2008? (The IRS continually reviews groups and 501c3's are being increasingly scrutinized by the
agency. Multiple issues including improper activities, enriching board members or family members, elaborate
enormous expenses are a few of the problems being investigated. Small $ fish, like home schoolers, are
unintentionally caught with the really big $, high profile, TV fish.)
Are the finances of your organization aligned with the purposes of the
organization and do they follow the laws of the IRS and your state's Department of Revenue or Sales Tax
Consider Paul's instructions, the believer's relationship to the authorities from
William Tyndale's 1526 translation of Romans 13:1-10. The first time that an English speaking person had the
opportunity to see the New Testament translated from Greek into English, this is what they saw, the plough boy's
Let every soule submit him selfe vnto the auctorite of ye hyer powers. For there is no power but of
God. The powers that be are ordeyned of God. Whosoever therfore resysteth power resisteth the ordinaunce
of God. And they that resist shall receave to the selfe damnacio. For rulars are not to be feared for good workes
but for evyll Wilt thou be with out feare of the power? Do well then: and so shalt thou be praysed of the same.
For he is the minister of God for thy welth. But and yf thou do evyll then feare: for he beareth not a
swearde for nought: but is the minister of God to take vengeaunce on them that do evyll.
Wherfore ye must nedes obeye not for feare of vengeaunce only: but also because of
conscience. And even for this cause paye ye tribute. For they are goddes ministers servynge for the same
purpose. Geve to every man therfore his duetie: Tribute to whom tribute belongeth: Custome to whom custome is due:
feare to whom feare belongeth: Honoure to who honoure pertayneth
Owe nothinge to eny man: but to love one another. For he that loveth another
fulfylleth the lawe. For these commaundementes: Thou shalt not comit advoutry: Thou shalt not kyll: Thou
shalt not steale: Thou shalt not beare false witnes: Thou shalt not desyre and so forth (yf there be eny other
comaundement) they are all comprehended in this sayinge: Love thyne neghbour as thy selfe.
Love hurteth not his neghbour. Therfore is love the fulfillynge of the
lawe." (This New Testament translation created today's modern English language.)
THEA's board is working and has worked diligently attempting to comply with the
federal and state laws.
For years all these questions bubbled below the surface in our board
meetings. I'd go talk with an attorney. Our treasurer would hire a tax attorney to prepare our IRS
annual report. A home schooling father would come to our meeting and offer a caution. We'd locate
someone who prepared tax reports for non-profits so they could prepare our report, but many times we did not feel
that we had great answers to basic questions about what was and what was not included.
That all ended one day when Michael E. Yates called me up and asked me to go out
to lunch. He had some questions he wanted to ask me. I had no sense of foreboding.
Mike, a CPA, and I had gotten to know each other while he was Treasurer of
MTHEA the middle TN chapter of THEA. He served in that capacity for two years. In addition, our
companies had done some business together.
At our lunch time Mike told me of the home school support groups and tutorials he
had been helping over the years. Their Treasurer would call with a question.
Initially, he knew all the answers because that was part of his business, his
profession, but he noticed a pattern. The questions were getting more complex.
They got so complex that he told them he needed to study before he could
During that period of study is when we had lunch. He began to ask me some of
the questions the THEA board had wrestled with over the previous 15 or 20 years. It was like recalling an
uncomfortable dream with all the uncertainties flooding over again.
Lana and I had and have a heart to serve home schoolers. The entire
board of THEA works unbelievable hours serving the home education community all across Tennessee and has for a
quarter of a century. Literally, thousands of families in and around TN are being served by these volunteer
leaders, sacrificially giving their time, efforts and energy to build their family and families near
None of us were trained in administering a 501c3 tax exempt business
organization. We spent every dime we got our hands on, mostly on serving, equipment and covering some board
expenses. No one was paid any salary until one of the chapters began paying a mom to answer their
Even volunteers have to properly, legally administer their
It's part of growth in the home school movement. We have businesses we have
to run. Run them well.
Mike and I began to consider our situation in Tennessee. We called HSLDA and
talked with Mike Smith, President. We found that one of the most frequently asked questions that came to
HSLDA dealt with issues of starting and running 501c3 not for profit, educational, tax exempt
That brief survey and our experience convinced us that there is a need that home
school groups are experiencing in starting and running these particular types of businesses.
HSLDA is our model. What HSLDA has done for home school families in the
legal arena, HSFSA wants to do for home school groups in the financial and organizational arenas.
HSLDA has an attorney assigned to each state. As HSFSA grows each state will
be assigned to a CPA. A fully populated HSFSA will have eight to ten CPA's analyzing state's organizational
and sales tax laws, rules and regulations.
Each state has laws of incorporation. They vary, so the advice given for one
state is different from another.
Every state has sales taxes and unique sales tax laws. The rules of
exemption are different for each, too.
Our surveys show that there are several dozen 501c3 home school organizations
already in existence in the USA and that there are thousands or tens of thousands of support groups, coops,
tutorials, sports teams, art classes, speech groups, etc. that could receive significant financial benefit by
properly operating their 501c3's.
Most smaller groups they can receive 501c3 benefits by
affiliating with their state home school group. Want to know how? Call 615 569-1994 M-F 9:00
AM - 5:00 PM or click here.
Yes, some states have more than one 501c3 group and each one could offer
affiliations to their groups.
Does your group have a cell phone? Why not? Are you paying sales taxes
on the phone? Why?
Is it possible to buy curriculum material sales tax exempt?
Who would you ask?
Mike and I formed HSFSA and we asked my son John Thornton to join with us in this
With our staff, we are serving the people in the groups that God has brought to
HSFSA and we continue to pray that God will work in the hearts of other leaders to see their needs clearly and
to clearly see how to operate their organizations, complying with the appropriate laws whether they chose to
work with HSFSA or not.
The price for our service is not cheap, unless you consider the
- IRS audits
- Department of Revenue audits
- Personal liability for Board members
- Perhaps a bit of anxiety
For several years THEA's tax advisor had received all our records, reviewed those
records and then told us that our level of gross receipts was less than $25,000. I was unable to comprehend
how that was calculated. My questions were addressed, but not in a manner I or the board
Following my conversations with Mike, THEA subscribed to the services of HSFSA
with full knowledge of my involvement in both organizations, President of one and Sales Director of the
HSFSA prepared our 990 for the IRS. I signed it and sent it in. They
wondered about the sudden change from less than $25,000 annual gross receipts to more than $200,000.
(This did not include our 3 largest chapters because they each have their own 501c3 status.) They wanted to
see more information and required that the previous years return be filed, including the summary report from three
Next the dreaded letter from the IRS arrived. It was a thin envelop with a
single page. It was very simple. THEA was fined $10,000 for failure to properly file tax reporting
information. There was no charge of failure to pay. It was for failure to file a proper 990
Now let me step from THEA over to HSFSA and our efforts there. The IRS made
provision in its tax laws for formation of a Central Organization. When Michael E. Yates saw the option of
establishing a Central Organization, he knew that this would allow the freedom and flexibility necessary for
smaller home school groups that come and go every few years to be attached to larger 501c3 state organization,
receiving the benefits.
A Central Organization is authorized by the IRS to approve groups
to be 501c3's. If an existing 501c3 has Central Organization status, they can review requests from
organizations formed to do EXACTLY what they do, establish a subordinate relationship with them and then
give them approval to operate as a 501c3.
Just think of the power of this option. If THEA could approve
organizations within Tennessee to be 501c3's because they did the same thing that THEA did, just for a
different group of people, that would allow extreme flexibility and freedom. THEA could operate on authority
delegated from the IRS.
It seemed so logical. We immediately filed for Central Organization status
for MTHEA. The discussions with the IRS began in earnest.
We found some difficulty. We were rejected. We located a former IRS
agent that worked in the 501c3 approval office for 30 years. He was a consultant, so we got him
to consult HSFSA and to help us seek approval.
At long last we scheduled a conference call between the three of us, the agent
that reviewed our request for Central Organization status and the head of the 501c3 approval
In that very hopeful and grave moment we found that the IRS is concerned about
home school groups. Home school groups don't share their information well with the IRS. The
IRS asks, "Why?"
Home schooling families apply for 501c3 status, as families. In their
wildest imagination the IRS cannot fathom how a family can believe that they could apply to receive 501c3 status,
much less expect to be granted such status by the IRS. How would they use it?
The IRS knows there are multiple tax exempt organizations that claim to be home
school related, but all of them are so closed about disclosing their financial records to the IRS.
They see the news reports. They see that there are millions of home
schoolers all across the USA. They look at their records and see such a slight trickle of information about
these group's finances.
They wonder, "What's going on there?"
They have concluded that the 501c3 home school organizations should be classified
with the gaming industry. You know. The organizations that operate bingo parlors, control slot
machines, and have other types of "gaming" operations with layers of organizational structuring keeping the probing
eyes of the IRS from finding out what's going on.
Knowing the IRS considers home schooling organizations and the gaming industry in
the same category made me feel uncomfortable, but not anywhere near as uncomfortable as receiving a $10,000 fine
from the IRS.
HSFSA advised THEA to prepare a letter to send to the IRS. It was less than
two pages. It was a plea for mercy and I weighed every word, carefully, prayerfully. Where was THEA
going to get $10,000? If THEA couldn't pay, was I liable?
After several long weeks, we were granted favor. Mercy was extended. Praise
be to God.
THEA had gone through the fire of transitioning from an unintentional renegade
organization to an IRS compliant organization. I'd bet they are going to watch THEA to see how
we handle the future.
Let me assure you that THEA and THEA's President (that would be me) were
But we still wanted to reach out to all the smaller organizations of home
schoolers across TN and across the country, helping them to engage our culture and receive all the benefits
that are available for educational purposes.
Our country and its laws favor having an educated citizenry. Our Republic
cannot continue without an educated citizenry, so tax advantages for educational groups should be and are in place,
not for home schoolers, but for everyone. What are the advantages for those types of businesses
operating within the law?
We have realized that you can do just that. Smaller groups can receive some
of the tax advantages of being part of an educational 501c3 tax exempt organization. MTHEA has
numerous support groups receiving this advantage. You are on the home stretch, so just click here and HSFSA can start helping your group be compliant with tax law and hopefully show
your group how to save some money.
Essentially, our message is this. You have chosen for a time to step
into an arena of service helping families, who want to home school their children. Thank
Don't be encumbered with the mechanics and details of running a tax exempt
business on top of serving the hundreds or thousands of families you care for.
During your period of service you have only so many hours to
give. Oversee the administrative things. In the details of your service, care for the families in
To start receiving a regular flow of information about operating 501c3's
please sign up here.
Thank you and God bless you.
Almighty God, please bless each of us, our families, our communities, our states,
our country and our world. Let us see how You have made things, the authorities You have
established and let us walk in obedience to those things that show we are a people who seek honor from
You. Let us hunger for righteousness and for Your peace.