Individual Scout Accounts Part Trois

[Stosh]

I don't think the issue here is the size of the problem. A few dollars here and there is "no big deal". That message, however, concerns me. Are we saying that white lies and petty shoplifting are okay, but perjury and grand theft aren't? How big does the issue have to be before it's no longer okay? How far do we push the issue before the IRS notices? We're golden until then?

 

So then what is it we're teaching our boys?

 

IF I were ever to consider an ISA in my troop, it would be set up that a scout could make personal contributions to his account out of his own pocket. If he paid dues, that could go in there too. The line in the sand would be the source of the money for the account. Is it truly the scout's own money, or is it a "cut" of the take on money given to the troop by people who felt they were supporting the troop and not the individuals within it specifically. When the boy leaves or ages out, it was always his money, held in reserve for him at his own discretion, including giving to another needy scout, and when he leaves. He either takes it with him or makes a donation of the account to the troop as a tax deduction. He could also give to another scout, but without the tax deductability. After all, it's truly his money.

 

The reason why it would be held in a "scout" account instead of a bank is for the ease of payment on scouting activities. I need $25 for the campout? Take it out of my account, rather than him having to write a check to cover it out of his bank account. It's kinda like the council office holding individual troop accounts to make payments on items purchased in the council.

 

That clear cut message of whose money is where is the kind of message I am willing to put forth for my scouts.

 

Stosh

[fred johnson]

Qwazse ... In your example ... You're refering $6000 in popcorn sales. In every instance I've seen, the troop is NOT under the same non-profit as the council. As such, the troop earned $3000 in their fundraiser. You're suggesting the scout gets to control/benefit from 66% of the non-profit funds. That's private benefit by definition. You call the IRS rules Marxism, but Marxism is the exact idea of a non-profit. Funds raised by a non-profit are used to benefit the goals and target population of the non-profit. If you don't like it, then issue the scouts an IRS form 1099 and move on.

 

If the justification to spend 66% money on a single scout is based on "it's his money", that's private benefit.

 

If the justification of who is selected as the scout is based on who raised the money, that's private benefit.

 

Justifying or selecting based on how the money was earned is private benefit.

 

I fully agree that scouts can get re-energized by high adventures and big events like Jambo and energized scouts benefits the troop. But does it benefit the troop to $2000? $2000 is well on the way to a new trailer. $2000 can help needy scouts or subsidize camps. It's free weekend camps for 80 scouts or week of summer camp for 8 to 10 scouts.

 

Anyway, my troop isn't perfect on this. But I'd rather understand the rules so we can move in the right direction than to pretend the rules work differently.

[qwazse]

Qwazse ... In your example ... You're refering $6000 in popcorn sales. In every instance I've seen' date=' the troop is NOT under the same non-profit as the council. As such, the troop earned $3000 in their fundraiser.[/quote'] Now THAT's fuzzy math. Like saying you can deduct only local taxes, but not federal and state taxes on your return! Look at the boy's membership card ... The numbers on the bottom left, the ones that tell a boy what council he is a member of! We make a point of telling boys that they are a fundraising for council and troop! I am just relaying how folks have been told how the "rules" actually work after concerned district key 3 read this and other blogs, talked to good lawyers and accountants and IRS agents.

But does it benefit the troop to $2000?

Lessee, the boy ain't spending it to pimp his ride and take his girlfriend on a road trip. But supposing you don't want to count that rugged Philmont scout who carries your pack for you after your back breaks at mile 8 of 12 ... following the money, the troop benefitted directly with 1k in its coffers, indirectly from council camperships for the families who needed it and council services to the tune of another 1k.

[boomerscout]

indirectly from council camperships for the families who needed it

If the $2000 was left within the troop, the troop could provide its own camperships as in all the troop money being used to send the entire troop to camp. That way, more Scouts within Council could go to camp.

 

If the HA or Philmont was promoted as primarily a training workshop to better spread the gospel then maybe no problem. We all know it's not. Both are promoted as being great fun and having a wonderful personal experience. That's private benefit. If you could get an actual letter from the IRS instead of a verbal opinion -- that would be great

 

(Twelve miles per day at Philmont? Ha-ha-ha!)

[boomerscout]

From Scouting.org

Can my unit credit amounts from fundraising to an individual toward their expenses?

No. The IRS has stated that crediting fundraising amounts constitutes private benefit. However, the

unit could use the funds (all or a percentage) raised to reduce or eliminate dues and various

registration fees, purchase uniforms and Scouting books, and purchase camping equipment. The

unit could also use its funds to provide assistance to individual Scouts in cases of financial

hardship.

 

From a CPA writing in Forbes: Fundraising funds used to pay registration fees, summer camp fees handbooks and so on are allowed under the principle of de minimis in that they further one of the stated purposes of Scouting. Handing a Scout $2000 for HA is hardly de minimis and is not one of the stated purposes of Scouting.

[T2Eagle]

Interestingly here's the last line from that Forbes column: All in [all], anyone running a pure booster club had best avoid individual fundraising accounts, even if they still see them working for [a] Scout Troop.

 

I went and read the actual Tax Court decision, there are a lot of differences between what the booster club was doing and what anyone using ISAs is doing, starting with the fact that the booster club existed purely for the purpose of raising funds for the athletes. Also the fundraising was all done by the parents, not by the athletes, and it was done to fulfill pre-determined yearly fees that had to be paid in full before an athlete could participate. The court decided that the beneficiary of the fundraising was the parents.

[qwazse]

If the HA or Philmont was promoted as primarily a training workshop to better spread the gospel then maybe no problem. We all know it's not. ....

(Twelve miles per day at Philmont? Ha-ha-ha!)

 

I don't know how YOU describe HA bases to your boys, but I'm very clear in explaining that they are training centers. When we send them (they don't go without unit leader approval), it's with the full expectation that they will return better prepared to help the rest of the Crew and Troop map out their own adventures.

 

72 miles in 5 days. Most of that group were senior venturers returning for a bigger challenge. In the following year their equipment was found on a number of young venturers' backs.

 

To be fair, most of those boys didn't bother with popcorn. They all had jobs. And they came back under budget and requested the surplus (zero of which was fundraiser $) be donated to the crew.

 

If the $2000 was left within the troop, the troop could provide its own camperships as in all the troop money being used to send the entire troop to camp. That way, more Scouts within Council could go to camp.

 

Lets' see. Who is the troop? Oh yeah. The boys. They can decide if they want to pool their ISA and send some to FOS. Based on my experience, I would more likely trust them to do that then a bunch of adults who belly-ache about needing a trailer, non-stick pans, or more propane for night lights!

 

T2E, thanks for the full quote from Forbes.

[boomerscout]

Qwazse:

I realize you are upset, but if BSA-national says that ISAs are not allowed, then that must mean that ISAs are not allowed. Therefore, your example of Scouts pooling their ISAs to send someone to HA/Jambo is specious because ISAs aren't supposed to exist. If some troops still engage in ISAs, that just means National has not yet yanked their charter.

While the article in Forbes started with an account of an athletic booster club, it more importantly went on to talk about de minimis and private benefit. In any case, the writer does not make the policy for the BSA; what he gave are just his opinions. That he may see some troop still doing ISAs is in the same category of should you jump off a cliff just because you see everyone else jumping off a cliff.

I suppose you can go rogue and start your own breakaway Scouting movement.

[Pack18Alex]

So here is our current plan… We did a special, if your family sold 150 Camp Cards ($750), your family attended our Council Camporee for free (depending on family size, this benefit was between $65 and $190)… This was an attempt to help sell more camp cards (and fund our Pack and Council), and to encourage families to come to the Camporee. The incentive was small for a small family, but some of our larger families struggle to pay for the camp outs, bringing 4 or 5 kids with two parents makes for an expensive weekend.

 

Was this a private benefit? I'm not sure. I know we have lower attendance at camporees than pack campouts, I believe cost is a factor, and less manpower makes it REALLY REALLY REALLY hard on those of us going.

 

Since I've not been directed by council on anything (they still talk about scout accounts at round table), and all I got in an email a few months back and discussions here, I'm assuming as long as I'm not really tracking ISAs and doing incentives for participation, I think I'm in the clear.

 

In previous years, Pack has paid re-charter out of annual dues. This year, we're going to charge a re-charter fee to include re-charter + boys life… I'm not sure if it'll be $37 (direct cost), or $50 (to contribute towards leader re-charter). However, if you sell a certain amount of Popcorn, we're going to waive dues. The idea of this was to start encouraging more participation in the fundraisers, and to squeeze a few bucks out of the families not pulling their weight.

 

I'm concerned that if we set the threshold at $150 (which raises $50), we're entering the substantial benefit realm… which is mostly a shame because I basically want a system to whack the families that won't fundraise for one or two hours a few bucks so we can have a nicer program.

 

Thoughts?

[King Ding Dong]

I am really confused. We now have some so committee members arguing over how to distribute proceedes for the camp card sales. Is that one paragraph all BSA is providing for guidance ? From what I am reading here it is not permissible to use ISAs. So scouts that do not participate must receive benefit ? But we can allocate based on financial hardship ? Who does not claim financial hardship ?

[Scouter99]

Anyone who has used the popcorn planning spreadsheet immediately sees it: The fundraiser funds the program, not individual participants in the program. That's how it's designed.

 

If the troop is sending a crew to ABC Base, that's part of the program. Everyone participates in the fundraiser, X amount of the proceeds are applied to the adventure trip just like every other trip. Not every scout goes on every camping trip, but your fundraiser subsidizes/mitigates the cost, and you haven't used ISAs to get there--that's not an individual benefit for those who go simply because some do not. Not everyone goes to ABC Base, but your fundraiser mitigates the cost.

[Stosh]

A scout goes over to his neighbor and says he's earning money to go to Boy Scout Camp, can he rake the yard for $20? The neighbor says okay. The neighbor is fully aware of the fact the money is going to go to the scout to pay for BSA camp. It's a transaction between the neighbor and the scout. Scout rakes yard, collects $20 and puts it in his ISA with the troop. It's his money, he can do with it what he wants. He does this 10 times and he has $200 in his account. The troop decides to pay the $50 deposit for ALL scouts going to camp and expects the balance to be paid for by the scouts. No problem, the scout simply says take it out of my account. The operative word here is MY account. End of discussion.

 

So the scout does it again 10 times and now he has $200 in his ISA. He needs a new pair of uniform pants for summer camp. He tells the committee treasurer to put $X in the council account so he can go buy pants. Now he needs $20 to go to a movie with his buddies. He asks for $20 to be issued from his account. Treasurer writes a check, End of discussion.

 

Mom and Dad see he's doing well in scouts and so they put $200 into his account. (no tax deduction, just a deposit into the scout's account.) Grandma and Grandpa also toss in $100. (same thing, no tax deduction). None of this money belongs to the CO and the CO has no say so in how it is spent. The Committee has no say so in how it is spent, and the SM has no say so in how it is spent. It always has been and always will be the scout's money.

 

When the scout leaves scouting or ages out, he takes the money with him. His ISA is nothing more than using a section of the troop's bank account to store his money so that when it is needed, the treasurer can simply transfer the money from the scout's section of the account to the troop's section of the account and no money has to exchange hands.

 

No IRS involvement/concern is part of this process. No money is raised for this account as a troop activity. No money transfers from troop activity into a scout's ISA ever! If it does, it needs to be identified as income and a 1099 needs to be issued from the CO. The only person authorizing income and expense of the account is the scout himself. If the troop wishes to pay the $50 deposit for all scouts going to summer camp, they simply write a check to the camp. It's a transaction between the troop and camp and has nothing to do with any individual scout. When the funds for the rest of the camp are due it either comes from the scout's account or he writes a check to the troop to pay the camp or pays the camp directly.

 

Stosh

[koolaidman]

Bravo Stosh! Well said and well written!

 

What I wish I could have written, but I'm too impatient with my composition skills.

 

 

 

 

[Basementdweller]

Yes, KDD. Boys that did not participate in your fundraiser benefit from it.

 

 

[Basementdweller]

With the individual incentive removed, will units set stricter rules for member fundraiser participation, make do with a projected decrease in funds raised, use pay as you go, allow families to "opt-out" of fundraising?

 

 

 

you cannot require fundraising participation