Is there a catch with getting FEMA/USFA grants???

[2Chief]

Seems like after we received a USFA grant of $144,000 for a tanker...the government has made business at our small town and poor department a little more difficult.

We are considered a Not-For-Profit Business entity in Indiana, and have a 501c3 Charitable Organization status with the IRS. We cook BBQ chicken twice a year to pay for hose, tools, etc and do the best we can. Our municipal town collects taxes from property owners and we have a budget of about $10,000 each year from that. So the town is good to us and at least helps provide fire protection the best they can. No complaints here.

But now, because our department received a grant since we can't afford trucks on our own, we must fill out the Form 990 long version tax return...which will require the help of a CPA. It frustrating because, even though we don't pay income taxes, we must report out our measly income information over a 20 page tax return from instead of our usual 2 page 990EZ form...just as if we were a multi million dollar corporation. But OK...if thats what the IRS wants...fine we'll do it. But even with the truck sitting here now...its not as if we've been propelled into the millionaires club. Were still cooking chicken to make ends meet.

Then to top it off...we get a letter from the Congress of the United States, House Small Business Committee telling us that we are considered a "large business" and that our grant incorrectly was given to such large business incorrectly. But this seems based on information after the fact.

So we were a small business before the grant...and are now a large business because of the grant...so the grant wrongly went to a large business???

They are telling us that we must "contact the relevant agencies and request that our "company" no longer be classified as a small business".

To top it off they didn't even get our grant amount right in the letter and have some contract reference number I've never seen. Looks fishy to me...yet it says Congress of the United States, B343C Rayburn House Office Building, Washington DC, 20515.

If were such a big business...why are we so poor?

Anyone else see this or anything else such as this related to receiving a grant?

[BC79er_OLDDELETE]

There are no catches, and it sounds like someone in DC made a mistake somewhere. Especially since Congress has nothing to do with the IRS's designations for small vs large businesses. The Small Business Administration is the only entity I can think of that cares about business size, everything else really doesn't matter. I know smaller budget departments that got larger AFG awards than that and didn't have to fill out anything. Smells like a screw-up to me.

[imafireman]

This is not on the same exact subject, but I feel this is a good place to ask this question. When I submitted our grant information, I posted that our operating budget is around $125000. We are also a very small department and do A LOT of fundraising activities. We have one weekend with bills in excess of $15000 to rais a profit of about the same. We pay out close to $3000 in truck and building payments. We spend a pile of money on food and such for our fundraisers making it look like we have a huge budget. Will this hurt us at grant time. It is all we can do to keep a positive balance in the accounts, but we look rich in the paperwork.

[BC79er_OLDDELETE]

As long as you explained how everything is raised, as well as what comes in goes right back out for necessary expenses I wouldn't fret too much. That's also why they ask how the budget is made, taxes, grants, donations, fundraisers, etc. $125K in fundraising is not the same as $125K in taxes. Fundraising depends on generosity and many times good weather.

[neiowa]

Seems like after we received a USFA grant of $144,000 for a tanker...the government has made business at our small town and poor department a little more difficult.

We are considered a Not-For-Profit Business entity in Indiana, and have a 501c3 Charitable Organization status with the IRS. .......

Your fire grant was to your city fire dept was it not? (As I recall the rules could not have been to your 503c3). Gov't bodies don't fill out IRS forms or report to the IRS.

[ktb9780]

imafireman and 2chief, if you all will give me a call I can probabaly shed some light on these subjects for you. Check my profile on contacting me offline or via phone.

[2Chief]

The grant was to our department "inc.". We are a small volunteer fire department in Indiana which was formed and incorporated in 1964 and registered with the Secretary of State as non-profit incorporated organization with the goal of raising monies for our cause...and putting out fires.

We are not a branch, arm, or division of our local town government. We are independent...just as practically all volunteer fire departments are in our area of the state. We have our own rules, by-laws and governing body. Only large cities have a city owned, ran and staffed FD.

We are IRS 501c3...and that was their definiation supplied to us. There is no other catergory we fit in. All other vol depts in our area are 501c3. Thats simply a definition of exempt non-profit charitable organizations.

All the names and addresses on the letter are legitimate. I'm calling them today to discuss the situation and possible misunderstanding.

Besides...they claim our grant was for $40,368...and it was actually exactly $144,000.

Thanks for the offers for help! I'll see what i can do today first.

[BC79er_OLDDELETE]

Ask them if the $40K was an offer.

[2Chief]

Called the number...got directed to the person on the letter...and much to my surprise I got an answering machine...to which I left my information. Oh well. I did my part.

[ktb9780]

Called the number...got directed to the person on the letter...and much to my surprise I got an answering machine...to which I left my information. Oh well. I did my part.

2chief, its time to bring out the big guns. Go driectly to your US Senators office and request assistance in dealing with this situation. I guarantee you that they will get answers and resolution.