finances and the chartering organization

[Twocubdad]

Good news, bad news. I would say it absolved the church of their tax liability, but it means that you don't have non-profit status and should be filing you own tax return. I'm also surprised a bank gave you a checking account without either a ID number or a SSN. I'd guess the pack treasurer way back when probably supplied their own SSN to get the account. That probably happens more often than not.

 

But this is WAY above my pay grade. You really need to be talking to a CPA.

[Marty_Doyle]

Not exactly. Most banks now require a EIN to open up an account.(You would not want to open an account with your social security number, because then in the IRS's eyes, the income in that account is yours, not the units.)An EIN does not negate tax exempt status. They are two separate things.

On the IRS Form SS-4 (Application to request an Employer Identification Number), there are instructions to follow to request an EIN for banking purposes only.

You should then talk to your local council, to determine if your unit is covered by the Council's "Group Letter Exemption" with the IRS, related to the Council's 501©(3) tax exempt not for profit status. If your unit is, then the EIN does not trigger the need to file any tax returns. If however, your unit brings in receipts of more than $25,000 per annum, or "unrelated business income"(UBIT), you might need to file an inforemational 990 return. And you should be talking to a CPA, not me. But, if your unit is bringing in over $25,000, you can afford real tax advice.

None of this explains why the CO wants to combine accounts. Unless their auditors are concerned about UBIT. But there is a threshold (of 10%(?)unrelated income to total income - would need really big popcorn sales to really small CO budget)that needs to be exceeded for this to be a tax exemption or tax liability issue.

Set up the meeting with CO and auditor, and ask Council for advice before and after.

Good luck.

[Fat Old Guy]

" I would say it absolved the church of their tax liability, but it means that you don't have non-profit status and should be filing you own tax return"

 

Non-profit is different from charitable organization status. The local Drum & Bugle Corps is non-profit as is the Porsche Club of America,however, neither is a charitable organization.

 

 

[Heacox]

Now we're getting to some good nitty-gritty facts! Thanks so much, all of you!

 

Popcorn sales for the past two years were (from memory) maybe $17K and $10K. Prior to that, it was negligible. Church budget is in the millions. No where near a 10% ratio, I'd say.

 

Now, if we can only get a meeting with the appropriate parties; no luck so far.

 

[dsteele]

Heacox --

 

Now that last response has knocked the professional cloak off my shoulders and brought out the grinning, stubborn protestant Irish background in me . . . (fortunately I'm next to you -- not coming at you.)

 

If the church wants control of the funds, they're goign to have to meet with somebody from the unit. Who else can sign off on the units bank accounts and who has the checkbook?

 

When they meet with you, ask your questions. But be prepared to actually listen to the answers. It may be a good thing.

 

DS

[eisely]

I am truly puzzled that the pack has its own EIN. My knowledge of these matters is certainly more than that of most laymen, but I do not claim to be an expert. This issue has been visited before in other threads. We all agreed that using some individual's SSN is a very bad idea. The default was the CO's EIN or the council's EIN. But the pack having its own EIN! Never seen that before.

[Fat Old Guy]

"Popcorn sales for the past two years were (from memory) maybe $17K and $10K. Prior to that, it was negligible. Church budget is in the millions. No where near a 10% ratio, I'd say."

 

That's some sort of popcorn sale! Wow! Also wow! for your church budget, that must be some big church. I attend a fair sized church and our budget barely breaks $300,000.

[dsteele]

Not to sound anti-government, but the EIN stuff for packs and troops and crews, etc. seems to depend on which state and which person at the other end of the phone you're talking to. There's a lot of consusion.

 

Enough confusion that I can't provide much more insight because I don't have it. If your unit is able to obtain it's own EIN, great, but if I were you I would check to see if the council allows you to use theirs first. Some do.

 

I don't even know who's right. But whatever works with the best of intents, is worth checking out.

 

That's an opinion. Not a policy.

 

DS

[Fat Old Guy]

"Not to sound anti-government, but the EIN stuff for packs and troops and crews, etc. seems to depend on which state and which person at the other end of the phone you're talking to."

 

EINs are issued by the IRS and getting one is easy. You simply need a name for your organization and fill out a form. You don't even need to file any papers of incorporation or anything else. All the Feds care about is having a way to track money so you can't cheat them.

 

Other paperwork may be necessary but the Fed paperwork is easy.

[dsteele]

Fat Old Guy is correct. EIN is a federal thing. It's the "other" paperwork that varies state by state.

 

DS