Path To Save Bsa?

[Scouter Matt]

So, BSA is in favor of individual Scout accounts, but there may be some potential issues with the IRS, depending on interpretation.

 

Reading between the lines, it sounds like if the majority of the funds went into the Troop general account, but some portion was used as an incentive credited towards Scouts individually for their Scouting activities you would be in the clear. Probably.

[Rick_in_CA]

So, BSA is in favor of individual Scout accounts, but there may be some potential issues with the IRS, depending on interpretation.

 

Reading between the lines, it sounds like if the majority of the funds went into the Troop general account, but some portion was used as an incentive credited towards Scouts individually for their Scouting activities you would be in the clear. Probably.

The way I understand the issues with individual scout accounts, if how much a scout raises determines how much money goes into their account, then you have a problem (it's fraud). If other criteria is used, such that a scout that doesn't do any fundraising can "earn" just as much money in his account as the best fund raiser in the troop, then you might be OK (or might not).

 

I seems to me that ISAs are basically a bad idea and should be dumped.

[HICO_Eagle]

Personally, I am becoming more and more convinced that the only way to save BSA is to vacate the entire Executive Board and terminate the "professionals" that have pushed the changes in the program for the last 20+ years.  That's clearly not going to happen so I'm doing a lot of thinking about whether I will renew in January.

[Gone]

The way I understand the issues with individual scout accounts, if how much a scout raises determines how much money goes into their account, then you have a problem (it's fraud). If other criteria is used, such that a scout that doesn't do any fundraising can "earn" just as much money in his account as the best fund raiser in the troop, then you might be OK (or might not).

 

I seems to me that ISAs are basically a bad idea and should be dumped.

You can raise money as a unit for summer camp. Those who participate each have an equal share put aside for them (scout account). Those who do not get nothing. This is okay. And we've run this past our tax attorney (and former IRS employee).

[Stosh]

You can raise money as a unit for summer camp. Those who participate each have an equal share put aside for them (scout account). Those who do not get nothing. This is okay. And we've run this past our tax attorney (and former IRS employee).

 

Okay, why does the money need to be going into any "scout accounts"   Summer camp costs $250.  Troop is going to pay $100 of that for each boy that goes.  The 10 boys going submit $150 to the troop and the troop treasurer sends off a check to the camp of all the money collected from the boys and $1000 from the troop treasury.  Where's the need for any "scout accounts"?

[Gone]

Okay, why does the money need to be going into any "scout accounts"   Summer camp costs $250.  Troop is going to pay $100 of that for each boy that goes.  The 10 boys going submit $150 to the troop and the troop treasurer sends off a check to the camp of all the money collected from the boys and $1000 from the troop treasury.  Where's the need for any "scout accounts"?

 

If Bobby's share is $250 and then he gets sick and cannot go to summer camp, the money can be allocated for next summer.

[Stosh]

So the boys get money for an activity whether they go or not?  A scout could get rich by not going to any activities under that policy.  

[Gone]

So the boys get money for an activity whether they go or not?  A scout could get rich by not going to any activities under that policy.  

 

Boy raises troop funds for a specific purpose, he gets to use those funds for that. If extenuating circumstances arise where he cannot use those funds, the troop has a policy that he can use them next year OR use those funds to defray other camping costs. They are earmarked from the fund raiser for "camping" and noted as such in our accounting. If he does not use them for camping they go back in the general fund, which is usually used to benefit one of our many service projects.

 

The troop derives no income. Our books balance year on year, though there are carry-over funds which are allocated to long-term deposits for activities. Helps to have a CPA and former IRS employee running the books.

[Stosh]

I totally understand, but do the parents reading these posts with $$'s in their eyes understand it?  I have had way too many parents argue with me about their son's money in his account.  The only way to combat that is to just do away with any and all "scout" accounts or any referencing that the money raised by the troop might somehow belong to an individual scout.  It is always expressed that money is raised for the troop/patrol.  If the boys sell enough popcorn they get a prize from the council, not money from the funds that go to the troop.  If the boy wishes to avail himself of any of those funds, he will attend the activities they are paying for just like any and all of the other boys in the troop.

[Gone]

I totally understand, but do the parents reading these posts with $$'s in their eyes understand it?  I have had way too many parents argue with me about their son's money in his account.  

 

Don't have that problem. We have a memo of understanding on all fund raising what the scope of the funds is for. This is part of making sure we document how the money was raised, by who and for what purpose. Required to insulated against the "personal benefit" IRS stipulation.

[Oak Tree]

I think the IRS is fairly clear in its decisions - it does not think that fundraising which provides benefit directly to people based on how much fund-raising they do is acceptable behavior for a tax-exempt organization. Essentially at that point, the Scouts are just working for hire and they may as well pay tax on it.

 

http://www.irs.gov/pub/irs-wd/201507023.pdf

 

Some of these cases are pretty much directly on point. I think it's true the most of this flies under the radar of the IRS and it is unlikely people will care, but we stopped offering Scout accounts because it sure looks like it is not in keeping with IRS rulings on the topic. YMMV.

[Gone]

I think the IRS is fairly clear in its decisions - it does not think that fundraising which provides benefit directly to people based on how much fund-raising they do is acceptable behavior for a tax-exempt organization. Essentially at that point, the Scouts are just working for hire and they may as well pay tax on it.

 

http://www.irs.gov/pub/irs-wd/201507023.pdf

 

Some of these cases are pretty much directly on point. I think it's true the most of this flies under the radar of the IRS and it is unlikely people will care, but we stopped offering Scout accounts because it sure looks like it is not in keeping with IRS rulings on the topic. YMMV.

 

I think you missed the part where I said we had a former IRS tax auditor (and our legal counsel) look at this issue and our set up meets the IRS directives.

 

Too many lay people read "no private benefit" and stop there. They don't bother to get direction directly from IRS as to what does and does not convey private benefit.

[Stosh]

@

 

I don't think you understand the issue here.    Even the IRS says that what the people tell you when you call the IRS directly is not necessarily a valid interpretation of their bureaucratic policies.  I know this for a fact because I called 4 times and asked the same question and got 4 different answers.  

 

Everything is all well and good until the come knocking at the door.  They went after high school booster clubs and there's nothing to say they can't go after BSA as well.  I guess I just don't feel good about getting caught with my hand in the cookie jar.

[Gone]

@

 

I don't think you understand the issue here.    Even the IRS says that what the people tell you when you call the IRS directly is not necessarily a valid interpretation of their bureaucratic policies.  I know this for a fact because I called 4 times and asked the same question and got 4 different answers.  

 

We have a letter from the IRS validating our approach to this issue. That's the get out of jail free card.

 

IRS will give those, but you have to ask.

[Stosh]

Ooooh. in writing.  That's impressive, didn't know they did that.  I'm still kinda stuck on all the boys working together to get everyone to the activities without having to "keep score" of who worked harder than who.