501(c)3s and ComplianceFor

DCs and Treasurers

Pony Club – DC and Treasurer Training

Organization and Structure

• USPC, Inc. is an IRS 501(c)(3) tax exempt organization. “Tax Exempt” is also called “Not for Profit“. Regions and clubs are also each 501(c)(3) tax exempt organizations .

• Each club and each Region has a separate and unique EIN (Entity Identification Number) which must be used on all its official documents including Bank accounts. Please call the National Office if you do not know your number. New Clubs and Centers must apply for their numbers and will receive guidance from the National Office.

• An exempt organization must keep such permanent books of account or records, including inventories, as is sufficient to show specifically the items of gross income, receipts, disbursements, name and addresses of all substantial contributors and any other information required.

IRS Training about Not for Profits

• The following link will connect you to training on tax-exempt entities directly provided by the Internal Revenue Service. http://www.stayexempt.irs.gov/virtualworkshop/TaxExemptStatus.aspx The module will take approximately 30 minutes to complete.

Pony Club – DC and Treasurer Training

Why is Pony Club tax exempt?

• The exempt purposes set forth in section 501(c)(3) are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals. 

• The United States Pony Clubs, Inc. was granted tax exempt status based on its EDUCATIONAL purpose/ mission.

Pony Club – DC and Treasurer Training What does this mean?

• Clubs/ Regions do not pay federal taxes• Clubs/ Regions must file a Nonprofit tax return

called the 990 • Donations to Clubs/ Regions are generally tax

deductible for the donor• Clubs/ Regions may apply to their home state

to be exempt from paying sales tax.

Sales and Use Taxes for fundraising

• www.fundraisetaxlaw.org This web site is designed to assist these non-profit organizations and fundraising companies in determining the sales and use tax implications, if any, resulting from product fundraising drives. The goal is to provide a publicly-accessible clearinghouse of information about the States' provisions, practices and procedures related to the transactional taxation of fundraising sales, products and organizations.

Pony Club – DC and Treasurer Training

General Information

• All funds raised in the name of a club belong to that club, and not an individual or group of individuals. Because donors are allowed a tax deduction for their gifts, it is imperative that the funds be used only for appropriate and authorized purposes.

An exempt organization that is required to file an annual return on Form 990 must keep such permanent books of account or records, including inventories, as is sufficient to show specifically the items of gross income, receipts, disbursements, name and addresses of all substantial

contributors and any other information required.

Pony Club – DC and Treasurer Training

Strictly Prohibited

• The use of personal checks to pay for club activities including instruction. Only Club checks may be used.

• Earmarking , accepting and distributing funds to or for a specific member.

• The use of club funds for a non-mission related expense—e.g. helping a club or community member recover from a fire.

• Using club funds to benefit a for profit business or individual such as a facility owner, trainer, DC etc. (conflict of interest).

e.g. Vacation, new horse trailer, entries etc. • Holding Lotteries or other

games of chance. Silent Auctions are ok however.

• Failure to comply risks loss of EXEMPT STATUS.

Pony Club – DC and Treasurer Training

Auditable Records

• Any sponsor has the right to inspect the financial records of the club at any time. (Bank Statements, Credit Card Info, Receipts, Expense Forms, etc)

• The IRS has the right to inspect the financial records of the Club at any time.

• Therefore, it is a good practice to have the financial records audited by an independent peer group if the club is small or an outside party if the Club is large frequently or when a new Treasurer or District Commissioner (RS) takes office. This can be an appointed ad hoc committee by the Club sponsors and should include at least one Regional Officer.

Pony Club – DC and Treasurer Training

Important Dates?• February 15

• May 15

• November 15

• January 30

• Annual Summary of Cash Receipts and Disbursement due to USPC national office and the Region

• The 990 IRS form is due for the prior year. (Copies need to be sent to the National Office and the Region and kept in the Club’s papers

• Budget sent to USPC, Inc. as part of the annual packet. Provide data and advice to DC and Club

• IRS 1099s sent to Individuals and Summary and appropriate information to the IRS and State

And, remember who we do all this for!