Mounted search and rescue

["Irvin Lichtenstein " <ilichten1@verizon.net>]

Whether or not you have filed for an IRS determination may not bother some
donors but many organized foundations and government programs require a
letter of determination from the IRS and may require 990's (tax returns)
even if you don't have to file them by law (990NR instead).

Almost all gifts from public charities must be given to other public
charities.  If the foundation making the grant is a 501c3 they can only give
to an organization determined to be in the same or "better" tax category. 
Additionally, many of these gifts may require several years of tax returns
to substantiate the IRS ruling and to satisfy the donor that the recipient
uses donations for it stated program and not overhead costs, like salaries
or floor space.   

SE PA SAR has a letter of determination as a 501c3 public charity so we can
satisfy that element of grant programs, if we could find a federal grant for
SAR.  We do not file tax returns because we don't have to and the cost of an
account to do so would exceed our budget (we may be tax free and deductible
but CPA's want money to express professional opinions in audits and taxes). 

PA requires a letter of determination for all state grants, exemption from
sales tax, and a showing that it was filed for if the corporation is
categorized as non-profit on the application.  This is actually a chicken
and egg situation as the IRS wants a copy of the corporation registration
and the state wants a copy of the IRS receipt for the determination letter.
We convinced both sides that we filed and they let us get away with it.
Since Inc. is not included in the corporate name the IRS gave us an EIN and
a determination letter without the corporation papers being returned as
registered from the Commonwealth. And we had an EIN for the Commonwealth and
the bank. 

You should not assume that because you are part of a sheriff's office or EMA
or some other government agency that you are covered by their tax status.
Depending on your agency's agreements with the government you may not be tax
exempt.  Many volunteer fire departments and their relief associations in PA
believed they were covered because they provided fire suppression to a
municipality through an ordinance. Both the IRS and the Commonwealth decided
they were contractors, not agencies and they had to file on their own for
tax exempt status, which is automatic because fire companies are exempt by
federal statute.  But you had to file. And you had to provide the
Commonwealth's auditor with certified copies of the filings and letters to
continue to receive state money.

Much of this information is public if you look for it.  But again, you must
look for it and discuss it with your sponsoring agency if you work through a
sheriff, EMA, municipality or similar agency. If you rely on an
affiliation's determination you may endanger their determination if you do
not file the proper subsidiary reports and roll ups.  This usually applies
to Pony Club, REACT, USEF, breed association, or similar organizations that
extend their umbrella determination to enclose local affiliates.
And if the determination is yours remember to file your 990's or 990NR every
year.

Irv Lichtenstein
SE PA SAR 


-----Original Message-----
From: msar-riders-bounces@lists.ibiblio.org
[mailto:msar-riders-bounces@lists.ibiblio.org] On Behalf Of Finkle, Tomi
<CTR>
Sent: Wednesday, May 05, 2010 5:13 PM
To: Mounted search and rescue
Subject: Re: [MSAR] search strategies for mounted SAR