seldon

We are chartered by a secular service organization. We do not yet have an account. Spent some time exploring all the options. Now we're crossing the t's and getting professional advice where we can.

This is what they get for putting an engineer in charge of the finances, right? That's what I tell the committee. So far no one has volunteered to take over. My understanding is that when you use the EIN to open a bank account you are declaring that some entity is responsible for it and any reporting that is required. That entity can either be a person, a partnership, or a corporation. If it is a person or partnership then everyone with their name on it may have to add a few extra pages to their 1040s.

The fact that it has been a while since you have opened a business account is where the confusion is coming from. It used to be that you could walk into a bank and get an account in the name of your club. Now we can't even get in the door without an EIN and my first born as collateral. Also, the IRS is after community groups, not just for money laundering or tax evasion, but for political activities that they don't like. If you can use your CO's EIN either to open an account or to list as the responsible party on the SS-4, that's fantastic. But what if you can't get it, or have it and don't have permission to use it? Do you fold the troop? That seems excessive, considering that the charter agreement doesn't mandate that the CO handle unit finances. My tip about 501c4 status is information that you can verify by reading IRS instructions, not advice to pursue it.

Sorry to have hijacked the thread. Thanks Krampus and Beavah for the questions. I do know of at least one unit that has a non-profit Friends of X partner but is chartered by a church. I don't really see the difference between a unit that has incorporated in order to meet the post-9/11 money-laundering rules and a unit that has all its finances under someone's SSN. In both cases the entity running the program is separate from the one responsible for filing the taxes.

I'm not familiar with how other units do "Friends of X" organizations, and I haven't found much information on how that works with the CO. Probably most are established specifically to enable tax-deductible contributions, whereas we're talking about just opening a bank account. I've asked about this before and I got helpful but not definitive answers. In our case the CO flat out doesn't want us using their EIN. When you apply for an EIN, you are assigning tax responsibility for the funds in your account. If blw2 can create a subsidiary EIN using the church, that'd be the way to go.

I find myself in a similar position. Despite all the warnings from the BSA against units seeking non-profit status, it seems like they've left us no other choice. A tip, federal 501c4 status currently carries no paperwork requirement or fee to establish for income up to $50,000. The annual tax return is a postcard. The difference between a 501c3 charity or church and 501c4 is that individuals cannot deduct donations to the latter. Getting things organized on the state level is a lot more complicated in California. Donno about Florida.

Part of the problem I see here is a confusion of roles. See, the Cub Scout pack is a patriotic organization. As such it is modeled after the U.S. government. The CM is like the President. He gets up on stage, makes a speech, and hands out awards, but at the end of the day he has no real power. The decisions are made by the committee behind closed doors. And they are all beholden to the CO, a reclusive organization that owns all the wealth and manipulates the pack for its own inscrutable purposes. But seriously, what is the role of your CC here? Is he/she actively involved in this discussion? Really, it's on him to make sure there's a place to meet and store the stuff and do it at a reasonable cost, or to delegate that task to someone else. The best course to take depends on whether you, the CC and COR are pulling in different directions or if some are just apathetic. If you think you can find a new organization to charter you, then, instead of rechartering with them, ask them to provide the things the pack needs. There's plenty a Cub Scout pack can do for a veterans group or church or whatnot in exchange for providing facilities.

This isn't the answer I wanted, but it is really helpful. It makes sense that the charter agreement would be silent on this point, because there are many troops already operating where finances are separate from the CO. Thanks blw2.

Thanks for the feedback. Our CO is a secular non-profit. In addition to providing facilities they also donate money to the units. By assets I mean money, trailers, tents and whatever else. SSScout, units applying for their own tax doohickeys is explicitly discouraged by national. I'm not saying we won't do it if we have to, but I want to exhaust all other options first. Popcorn money is sent to the troop from the council? Or to the CO? By tax doohickey do you mean state sales tax exemption, or the full-on federal business?

It seems like a common enough problem. I was just wondering if anyone had successfully resolved something like this, or knew of any additional documents involved in the chartering process. Also maybe venting a bit. DE did not have any helpful advice.

Hi, first time posting here. Reading Scouter.com forum has been very informative for me as a leader and now committee member, and now I'm hoping y'all can help answer some rather technical questions. Our charter organization is, as many of you have found with yours, unhelpful with finances. They help fund the units, which is great. In their opinion the funds disappear into a black hole once the check is written. I assume the scouting units are treated as an expense on their books. If you've read the BSA fiscal procedures for units, you know that's not how it's supposed to work at all. BSA considers scouting units and their assets to be part of the CO. The funds don't leave the CO until they are spent by the unit. However, there seems to be an inconsistency between the Annual Unit Charter Agreement and the Fiscal Policies and Procedures. The charter agreement says the CO has to provide facilities, training, and leaders and to conduct the program according to BSA rules. OF COURSE the CO doesn't understand that the scouting units are under their umbrella, because it's not actually specified by the agreement. It's not even mentioned in the Rules and Regulations. The only place I have seen it specified is in the Fiscal Policies and Procedures for units. Practically speaking, there is nothing I can take to the CO that says they have agreed to take ownership of unit assets and report income and expenses to the IRS. Or is there? Is the Annual Unit Charter Agreement all there is between the council and the CO? Or does the agreement refer to some document that specifies that the scouting unit is not a separate entity from the CO? Seldon