more banking questions

[blw2]

Ok

Some of you may recall That I have been asked to be the troop's treasurer.

more or less 5 months in and I am still not up an running as treasurer...ugh.  It just shouldn't be this hard.

 

So first the back story

We're chartered by a catholic parish

the current bank account is at a local community bank that has proven to be difficult to work with.  Errors, lack of good online banking, only the one branch, etc...

The account was established by the now deceased SM. We suspect that he set it up perhaps under his own ssn.  It doesn't seem to be directly tied in any way to the CO.

The CC wanted to transfer to a fresh and new bank account at a differnet bank, set up properly, prior to my taking over.

So, we have been trying

The bank sets up the account, but later determines taht more paperwork is needed.  Currently, they are after personal information for the parish pastors.  Just doesn't seem right to me, but regardless, we asked but are getting resistance form the parish office.

Frankly, they don't understand any of it, originally thinking that they were not in any way tied to the troop.

Regardless, it just seems like one hoop after another, and it's so much more deeply convoluted since the parish falls under the diocese which falls under the ecclesiastic congress...

 

So to my question:

The BSA Fiscal guidelines point to a unit having its own EIN, filling out an SS-4 form

the specific verbiage for your reference:

Does a unit need its own tax identification number? If so, where do we get it?

The answer depends on the chartered organization. Most units obtain their own tax ID number by

completing IRS Form SS-4. The current form and instructions are available on the IRS website

(www.irs.gov). The chartered organization should be the “responsible party.†Contact your chartered

organization for written permission. Contact your local council for more information.

 

So, i'm feeling like this is a combo problem...the parish making things more difficult than it needs to be, and the banks not really knowing how to deal with it either.

 

So, if I were to fill out this SS-4, and establish some sort of non-interest generic club-type account not tied directly to the parish or to their EIN, would I then have to file a tax return every year for the troop?

and do profits from fundraising campaigns complicate this even more?

 

​I just want to be done with this madness and move forward!

[Stosh]

I'm not a tax lawyer and from the description given, the people seem to be coloring so far outside the lines that I wouldn't dare offer even the most remote suggestion on this.

 

The reason CO's are non/not-for-profit is that the income from anything is not taxable.  I do believe that the once popular 5 adults sponsoring a troop/pack needed to establish a non/not-for-profit legal entity to do so and then go through the annual legal issues every year. 

 

I would have the parish ask one of it's lawyer parishioners to dig to the bottom of this and get it all straight.  Hundreds of Catholic Churches sponsor troops and pack and don't seem to have the hassles being described here.

 

If I were you, I'd "with all due respect" turn over the treasury fiasco to the committee to sort out, this is not the responsibility of the treasurer to be in this position.  Once they have it resolved, then take over the treasurer position.  Not meaning anything negative towards you, but you are in no position to be making these kinds of decisions for the troop.  It was this kind of poor judgment and questionable decision making that got this mess established in the first place.

[Krampus]

Suggest this:

 

- Don't transfer the money just withdraw and redeposit. Use a bank check. Saves the paperwork. If there's checking on the account already just open the new account with a check.

 

- Use the church irs number. Open it as a business account.

[blw2]

 

If I were you, I'd "with all due respect" turn over the treasury fiasco to the committee to sort out, this is not the responsibility of the treasurer to be in this position.  Once they have it resolved, then take over the treasurer position.  Not meaning anything negative towards you, but you are in no position to be making these kinds of decisions for the troop.  It was this kind of poor judgment and questionable decision making that got this mess established in the first place.

That is exactly what I have been doing all these months.... letting the existing CC sort it out.  It's what they wanted to do & I think it's the logical approach....

except that I do think the right thing to do is help.... that what we all are trying to do with the game of being scouters after all, right....help.

I'm certainly not planning on making any unilateral decisions for the troop.

 

Suggest this:

 

- Don't transfer the money just withdraw and redeposit. Use a bank check. Saves the paperwork. If there's checking on the account already just open the new account with a check.

 

- Use the church irs number. Open it as a business account.

yeah, that too is exactly what we have been doing.... or trying to do....

in an effort to not making an already too long first post even longer, I skipped over some of the saga

The CC initially opened a bank account at another bank, with several of us set up as signers, made an initial deposit (by check from the old account)...then a short time later the bank came back wanting more info from the parish and diocese..... which was proving difficult and even silly

So on the advice of a parish bookeeper familiar with the troop, we closed that account and opened one at the same bank the diocese uses.... thinking things would be streamlined since they know how the parish works, have a relationship, etc....

well, similar things are happening.

The problems are mostly it seems because the ownership of tax id is complicated.  The parish padre's are "in charge" of the parish, but the parish bank accounts were established prior to them being there.  The EIN's are tied to the diocese.....which ties to the bishop.... and the bishop that was tied to that number is long since retired....

just one big mess from my perspective....

And to your point Krampus, we have a letter form the parish giving permission to use the EIN to open the account you describe.... no problem there.  It's just when teh bank starts processing papers on the back end, verifying ownership of teh EIN's etc.... that things get muddy.

 

So, I'm left thinking our best direction would be to just forget about the non-profit status and using the church's number all together.

 

I just can't believe that with the probably thousands of BSA units chartered by catholic parish's and schools, that this is even a blip or a question mark.  Should just be done and done.  Really unbelievable.

[Krampus]

The problems are mostly it seems because the ownership of tax id is complicated.  The parish padre's are "in charge" of the parish, but the parish bank accounts were established prior to them being there.  The EIN's are tied to the diocese.....which ties to the bishop.... and the bishop that was tied to that number is long since retired....

just one big mess from my perspective....

And to your point Krampus, we have a letter form the parish giving permission to use the EIN to open the account you describe.... no problem there.  It's just when teh bank starts processing papers on the back end, verifying ownership of teh EIN's etc.... that things get muddy.

 

So, I'm left thinking our best direction would be to just forget about the non-profit status and using the church's number all together.

 

I just can't believe that with the probably thousands of BSA units chartered by catholic parish's and schools, that this is even a blip or a question mark.  Should just be done and done.  Really unbelievable.

 

 

Try this:

• Open a normal small business account and put the CC, treasurer and the SM on the signature card.
• Move your money to this account.
• AFTER all this is done you can add the tax id.
• We use a major bank and did not have to have a tax id or anything else to open a small business account.

[scoutldr]

Does your Council have a Catholic Committee on Scouting which is the liaison between the Council and diocese?  I would contact that person for help in liaising with the parish.  You are correct, this is way more complicated than it needs to be.  I would also inquire as to what other parish-sponsored units in your council are doing and follow their lead.  Use the same bank they are using if possible.  It's not (or shouldn't be) rocket surgery. 

[Krampus]

Does your Council have a Catholic Committee on Scouting which is the liaison between the Council and diocese?  I would contact that person for help in liaising with the parish.  You are correct, this is way more complicated than it needs to be.  I would also inquire as to what other parish-sponsored units in your council are doing and follow their lead.  Use the same bank they are using if possible.  It's not (or shouldn't be) rocket surgery. 

 

If he's in the south, the next closest Catholic unit might be two states away.

[blw2]

Does your Council have a Catholic Committee on Scouting which is the liaison between the Council and diocese?  I would contact that person for help in liaising with the parish.  You are correct, this is way more complicated than it needs to be.  I would also inquire as to what other parish-sponsored units in your council are doing and follow their lead.  Use the same bank they are using if possible.  It's not (or shouldn't be) rocket surgery. 

ohhhh... that's a whole other can-o-worms!

Yeah, when i first made contact with the parish office for some initial information, they (the secretary and others) really pushed hard out of the gate that their bookkeepers should be doing all of this.... almost as if we shouldn't even have a treasurer, but instead should be operating like the youth group and other ministries.

So

she steered me to contact the person in charge of that Catholic Committee. She was thinking they would straighten me out..... but I thought, "hey great idea!  I know them a bit having worked with them on religious medals, so they will certainly understand the whole thing and help me get the parish office straight."

Oh, couldn't have been more wrong.

They set in motion this whole thing about the troop not falling under the parish at all.  that we are owned by the BSA, etc....  They were every bit or more clueless.

[blw2]

As I look at the SS-4 form (as suggested in the BSA's fiscal policy document) to get our own EIN as a troop

it really looks like this might be the way to go..... (based only on what looks logical)

listing the parish as the responsible party, with their EIN.

I'm not sure who the executor would be though.... maybe me as treasurer would be most logical?

but based on recent experiences, I'll bet the bank would look back to the responsible party for the executor, so then they would want to list the pastor..... which loops us right back around to where we are now.

 

man, we're not trying to cut a profit.....all we want to do is take some scouts camping!!!

[Krampus]

Oh, couldn't have been more wrong.

They set in motion this whole thing about the troop not falling under the parish at all.  that we are owned by the BSA, etc....  They were every bit or more clueless.

 

I think if you asked all the COs in the country, I suspect a VAST majority of them would think this is the case. I highly doubt that they understand that the CO "owns" the unit and it is an extension of their ministry.

[blw2]

If he's in the south, the next closest Catholic unit might be two states away.

ha, I missed this post before

 

 

yes, you're correct  Some areas of the south are very sparsely populated.

 

Not hear in Florida though!  That the thing that's even more mind boggling to me.... it seems like this wouldn't be such a new concept.

 

I'm now fully understanding why the previous folks (troop and before in the pack too) seemed to like to skirt the system so much.

[seldon]

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.

Edited May 12, 2016 by seldon

[Krampus]

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.

 

 

Isn't this the same as forming a "Friends of" organization?

 

I would think there's a problem forming your unit in to a non-profit being already an entity of your CO. I would think there's issues there. It would be like the youth ministry forming their own non-profit but being under the charter of the church.

 

There are enough lawyers here (@@CalicoPenn?) to weigh in on this subject.

[seldon]

Isn't this the same as forming a "Friends of" organization?

 

I would think there's a problem forming your unit in to a non-profit being already an entity of your CO. I would think there's issues there. It would be like the youth ministry forming their own non-profit but being under the charter of the church.

 

There are enough lawyers here (@@CalicoPenn?) to weigh in on this subject.

 

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.

[Beavah]

Yah, hmmmm...

 

Da bankin' regulations keep gettin' more complimicated because of the efforts to curtail money laundering, eh?  And Dodd-Frank, and other things.   Makes doin' normal stuff hard.

 

@@blw2, Catholic Church organizations that are not religious orders have a funny legal structure, eh?   They are usually set up as somethin' called a "Corporation Sole" directed by the bishop.   Da actual structure of that sometimes varies by state.  What that means is that from a legal perspective the only entity is the diocese, eh?  Parish's don't exist legally, they're just administrative subdivisions of the diocese corporation.   Of course the diocese doesn't want to be givin' out its EIN willy-nilly (though yeh can look it up ).   So what happens is that there are accounts on accounts, eh?  Sometimes with parishes, sometimes with ladies' groups and mens' groups and other things.   I had a colleague who was once involved in tryin' to audit a Catholic diocese.  He said "byzantine" didn't even begin to describe it.

 

No reason for yeh to get all caught up in that, eh?  Yeh just do what everybody else did to create "byzantine" and yeh create your own account.

 

Some options for yeh.

 

1. Take the parish up on da offer and let 'em handle the bookkeeping and put stuff in their accounts.  Advantage is yeh can earn interest in the accounts without creatin' headaches.   Yeh also get oversight and internal auditing for free, eh?   It can be a good way to go, and I know several troops that do this.
2. Use the parish EIN to set up the scout account if it has one.   Not every parish does, it depends a lot on how da diocese corporation chooses to byzantine things.      I know several troops who do this, eh?  It's a good way to go because if someone goes off da rails or things run downhill and then the treasurer kicks the bucket, yeh still have an identified (pseudo-)entity that can re-establish people on the account. 
3. File for your own EIN for the troop in the way you suggest.  In this case, I recommend yeh don't get an interest-bearing account, since that could then make da tax situation a bit more complicated in terms of hoops yeh have to jump through.   As a first choice, I'd use da parish address and the parish business manager as contacts, eh?   Better than puttin' anybody else down because it creates headaches changin' address with turnover.  I don't know anybody doin' this.
4. The bank should have an account class for small community organizations, eh?  Things like unincorporated community associations and the like.  In this case, yeh have to use personal SSNs.   That's fine, eh?  Just get a non-interest-bearing account to avoid the tax headache.  Put at least 4 people on the account to allow for turnover, and if possible get someone from da parish as a signatory as well.   If yeh can't use parish staff, yeh might be able to get someone from their mens' group if they do work with kids.  I know lots of troops who go this route.

Yeh don't want to try to separately incorporate your unit, eh?  That gets way too complicated and generally becomes too much work for a typical unit.  Sometimes if you're somethin' like a Sea Scout Ship where yeh have major assets (like big boats) or folks are makin' major gifts it might make sense to do that, but not for a regular troop.

 

Of course this is just da off-da-cuff advice of someone on the internet who looks like a furry long-toothed critter with big teeth.   If yeh want genuine legal, tax, or bankin' advice, I reckon there's reasons why yeh have professionals in your area, eh?

 

Beavah

Edited May 12, 2016 by Beavah