Tax write off

[BadenP]

Sorry Beav but you got these both wrong according to tax law, and two former IRS agents. Now I am just curious are you an attorney, if so whats your speciality? You should read the additional charter documents and agreement all CO's must sign before a charter is granted sometime, these are usually delivered direct to the IH by the DE, not the stuff the unit gets. Common sense tells you Beav that the boy scout program is not a youth ministry program (LDS may be the exception), look at its structure and purpose, your argument is not even logical. Man you are getting cranky in your old age, lol.

 

Look Beav it all comes down to doing what you think is right and if you never get audited then all this argument is a waste of time, but if you are caught in an IRS audit you will receive no forgiveness from them, you know the old adage, "ignorance of the law is no excuse." Unless there is a large sum of money involved or a repeated history the IRS probably won't even waste their time coming after you. Bottom line get good solid reputable legal advice rather then depending on what a friend or a website tells you.(This message has been edited by BadenP)

[hotair36]

Beavah:

If you want the cite for who is responsible for the accuracy of the return, it is Title 26 US Code, 7206(1) Subscription to a false return under penalty of perjury (3 year felony). Aiding and assisting in the preperation and filing of a false return is 26 USC 7206(2), also a 3 year felony.

 

Deducting the leader fee for summer camp or the Jamboree staff fee was common a few years ago but, National no longer issues a letter for the staff fee and I suspect someone claimed the staff fee, got audited and lost and BSA national no longer issues a letter.

[Crossramwedge]

One of the problems here is that a lot of Church's do consider the Scouts to be a part of the Ministry. They incorporate them into the youth ministry of the Church. The top leaders in our church go to leadership classes (not BSA related) held by the church before they even can become a Scout Leader in the Troop. The CC, COR, SM, Main ASM all must be members in good standing with the Church. We report and turn over any funds we receive to the church. The church takes care of our Scout Accounts and so on and so forth. How in the world can the IRS then say that the Troop is not a ministry of the Church. That may be the law, but its not right and needs to be changed. We are an interdenominational church and are not affilated with any main line denomination.

[Oak Tree]

Here's the thing, guys. You may indeed be former IRS agents; I have no reason to doubt you. But what you're saying is contradicted by every IRS and every Boy Scout link I can find.

 

On the deductibility of meals, straight from an IRS publication:Travel. Generally, you can claim a charitable contribution deduction for travel expenses necessarily incurred while you are away from home performing services for a charitable organization only if there is no significant element of personal pleasure, recreation, or vacation in the travel. This applies whether you pay the expenses directly or indirectly. You are paying the expenses indirectly if you make a payment to the charitable organization and the organization pays for your travel expenses.

 

The deduction for travel expenses will not be denied simply because you enjoy providing services to the charitable organization. Even if you enjoy the trip, you can take a charitable contribution deduction for your travel expenses if you are on duty in a genuine and substantial sense throughout the trip. However, if you have only nominal duties, or if for significant parts of the trip you do not have any duties, you cannot deduct your travel expenses. Ok, this seems to make it clear, you can deduct your expenses. Is being a troop leader really what they are talking about here? Well, let's see. Maybe an example comes next.Example 1.

 

You are a troop leader for a tax-exempt youth group and you help take the group on a campng trip. You are responsible for overseeing the setup of the camp and for providing adult supervision for other activities during the entire trip. You participate in the activities of the group and really enjoy your time with them. You oversee the breaking of camp and you help transport the group home. You can deduct your travel expenses. Well, that sure sounds like leading a Boy Scout unit. Now, what expenses are they talking about? Maybe they don't include meals because you're getting something of value. Let's see. Do they define travel expenses or say what's included? Well, yes, later on they do.Deductible travel expenses. These include:Air, rail, and bus transportation,Out-of-pocket expenses for your car,Taxi fares or other costs of transportation between the airport or station and your hotel,Lodging costs, andThe cost of meals.How you can possibly read that and say that meals are not deductible just is beyond me. I'll happily go to court with the IRS if they disallow my meals while directly printing that meals can be deducted. Holy mackerel!

[scoutldr]

While this is an interesting discussion around the campfire, bottom line is it doesn't matter until you're audited, as has been pointed out. Reading Oak Tree's post, I agree that camp fees could be deductible...if you have "duties" related to the trip. I guess it could be argued that BSA only requires "two deep" leadership, so the only ones who have "duty" are the leader and assistant. The other six dads and moms who tag along are there for the fun of it, (or to fulfill "helicopter" tendencies) except for providing transportation to and from.

 

This is fun!

[BadenP]

Oak Tree

 

scoutldr hit the nail on the head, it does not matter what anyone here says, it is how the IRS auditor interprets the law during an audit that counts. I agree with you about camp fees by the way, but if you read the wording in your own post from the IRS pub there are a couple of inconsistencies or loopholes that could result in an audit going either way.

 

I also agree that the tax laws in this country all of which have been written and passed in Congress have become so complicated and convoluted that it is time for a total redo and simplification of those laws but also how they are enforced by the IRS.

[Vicki]

hotair, I think I'll stick with what I wrote - on a practical level, we have been talking about churches as CO's. There may be churches out there that file 990's, but they don't have to and I don't know of one that does (because it means listing your top donors). Before anybody goes looking to prove me "wrong" I will cede that they probably do exist, just not within my experience.

 

So the IRP is most likely a moot point. In any event, I will tell you that any form I received that had the CO's EIN on it went directly to the CO's treasurer (for instance, the form reporting interest if we were lucky enough to have an interest bearing checking account). I would hope any troop treasurer worth their salt would do the same. "Worth their salt" is kind of a fun phrase - Roman troops used to get paid in wheels (or portions thereof) of salt.

 

Just for the record - it's "de minimis" - meaning so minimal as to be beneath regard.

 

Hey, John! Happy holidays!

Vicki(This message has been edited by Vicki)

[scoutldr]

Fair tax, anyone? I would like nothing more than to see the tax code buried once and for all. When the average American can't figure out on their own what their obligation is, and a whole industry is devoted to income tax preparation, legal defense, etc...something is terribly wrong.

[Beavah]

If you want the cite for who is responsible for the accuracy of the return

 

Nah, hotair, I wanted a cite for da claim that "I can tell you this for a fact they [units] are NOT considered to be part of their sponsors 501c3 organization under Federal tax law."

 

I see I'm still waitin' for one.

 

On da issue of meals, whether or not National issues a donation letter is irrelevant for expenses. I think it is quite correct that they should not. Expenses aren't a donation, they are expenses, and the charitable entity can't be put in the position of verifying the person's expenses.

 

That does not in any way change the fact that charitable expenses, including overnight travel, fees, lodging, and meals, are deductible at 100%.

 

This is da plain language of da regulation, guys. 26 CFR 1.170-2 (a)(2).

 

But yeh all are inspiring us with da knowledge that IRS agents actually have of the tax code. Happily, it is most definitely not "how the IRS auditor interprets the law during an audit that counts." Leastways, not in our country, though one can argue that administrative law is the furthest departure we have from our core principles, as the least "checked" and most invasive function of da Executive Branch.

 

Right there with yeh, scoutldr!

 

Beavah

(This message has been edited by Beavah)

[Oak Tree]

BadenP,

 

I figure this is a fun academic exercise. I realize I'm not likely to get audited over my claiming of Scout meals. I'm not even sure my deductions matter, given the bizarre Alternative Minimum Tax and its application to my return (yes, Mr. Taxman, I'm paying too little federal tax due to the fact that I'm using the well-known tax loopholes of paying state income tax and having kids.)

 

I agree that it only "matters" if you get audited. And then I agree it's important to know how the auditor will interpret the law. But that doesn't change what the law actually is. So can you point me at something that shows what the law is? Where does the law say, or what part of the law is interpreted to say, that Scout troops run by churches would not be able receive tax-deductible donations? This is done all the time, so you'd think that if it weren't the case, somewhere there would be some document saying so. Can you point to any tax court ruling to this effect?

 

I agree you can say "web sites don't matter." "Nothing out there is official." "What the BSA says doesn't matter." "What your church says doesn't matter." So you can discount all the evidence I can easily find on the web, and just say "My personal experience trumps all of that." But can you show me anything that supports your position?

[BadenP]

Oak it has been a while but the defining book would be a copy of the Internal Revenue Code books which IRS auditors use like a Bible during an audit. I no longer have access to it those books, but the Western Los Angeles Area Council on their website has put a statement, under council news, from the IRS and written in plain english the tax status of a scout unit and its relationship to its sponsor, as well as can a scout unit be a tax exempt entity that would answer almost all of the questions being asked here, definitely worth the read.

 

Beavah, laws are always subject to different interpretations, that is why we have the judicial branch to settle those arguments, but you should know that with your alleged legal background. As you should know that these tax laws are not clearly written in plain English but in legalize, so it is very possible that the IRS could interpret them differently from yourself. The average person doesn't have the expertise to challenge an audit decision nor the funds to challenge the IRS in court. Every year Congress creates new tax laws and changes exsisting ones to the point where even the experts, attorneys, accountants and IRS employees have trouble keeping current. So you can continue to be a blowhard and throw your insults but it doesn't change the fact that our tax laws are a mess and your interpretation is just that and nothing more. By the way you never did answer my question as to what your legal expertise/background is, if any.

[Oak Tree]

BadenP,

 

Ok, great, thanks for the link. Let's take a look at what it says.

http://bsa-la.org/index.php?page=tax-exempt-status

 

First off, it looks like the Western LA County Council has exactly the same statement as all the other councils that have been referenced.Units must either: 1) obtain their own employer identification number ("EIN") using IRS Form SS-4, or 2) use the EIN of their chartering organization. Sometimes, the IRS correctly explains to a unit the process for an organization to be considered a "subordinate" of a parent organization, and this explanation is interpreted as permission to do so. But, again, the BSA National Council cannot, and never could, declare Scout units to be subordinates. Also, receiving an EIN does not imply tax exempt status; it is nothing more than a unit's "Social Security" number. If a troop's chartering organization is a church (and tax exempt), the troop could be considered tax exempt only if the church let the troop use the church's EIN, or the troop's EIN was included within the church's group exemption by the church. "Unit" gifts would be tax deductible as gifts to the church, not to Scouting. The primary quote I take away here is "Unit" gifts would be tax deductible as gifts to the church, not to Scouting.

 

So this is the way things are normally done, and it all works fine.

 

But that statement appears to be the opposite of what you are stating in your first couple of posts on this topic.

 

BadenP: the WLAACC has a statement that would answer almost all of the questions being asked here

 

BadenP: The troop can not legally use the EIN of their sponsoring church

WLAACC: Units must either obtain their own EIN, or use the EIN of their chartering organization.

 

BadenP: A scout unit is considered to be part of the BSA

WLAACC: Scout units are not considered subordinate organizations of the BSA

 

BadenP: they are NOT considered to be part of their sponsors 501c3 organization under Federal tax law.

WLAACC: Sometimes, the IRS correctly explains to a unit the process for an organization to be considered a "subordinate" of a parent organization, and this explanation is interpreted as permission to do so.

 

I find it hard to reconcile your statements that the WLAACC answers the questions, and yet be consistent with your other positions.

[BadenP]

Oak

 

I see the problem in the semantics, A unit must first be given permission to use a sponsors EIN, it is not automatic and can cause problems for the sponsor if they are taking contributions, stating they are a tax exempt organization, because then the sponsor is responsible for reporting those contributions. Thats why most sponsors do not let scout units use their EIN because of the confusion as to who the contributor is giving their money to.

 

"a scout unit is not considered a subordinate to the BSA", thats because a subordinate would be entitled to solicit donations in the name of the BSA, it is just a semantic legality to prevent this from happening. It does not mean a scout unit is not part of the BSA for example units are offered insurance under the BSA corporate umbrella.

 

A scout unit is not legally allowed to use a sponsors EIN, that is true since that number identifies only the sponsor, if they do give permission than they become legally responsible for reporting those donations solicited by the scouts.

 

I hope that helps clarify things a bit.

[Beavah]

Beavah, laws are always subject to different interpretations

 

Nah, not always. There is plenty of settled law, and most law is written quite plainly. Let's take, for example, the text of the regulation for which I gave you the citation:

 

"Reasonable expenditures for meals and lodging necessarily incurred while away from home in the course of rendering donated services also are deductible."

 

That has a very simple, plain meaning, eh? No particular "legalese", though "reasonable" is a term of art and "away from home" is subject to definition within da regulation. What it means is that out-of-pocket camp fees which are required as part of donating one's time to a charitable organization like the BSA are deductible.

 

You see, when da regulation says "are deductible", it really does mean they are deductible.

 

Yeh won't get any argument from me that da whole thing is a mess, eh? But that's one of da reasons to take extra care before makin' definitive statements that may lead others astray. I reckon a scouter should take whatever deductions he can. Far better to have him keep his money and use it for scoutin' than to give it to the IRS when the law does not require him to, don't yeh think?

 

Still waitin' on that magic citation that makes a church sponsored program not a church program, BTW. I await it with breathless anticipation. And you're quite correct, I never did answer your question as to what my legal expertise/background is, if any.

 

Beavah

 

[Beavah]

Oi! BadenP, you're givin' me a headache!

 

Thats why most sponsors do not let scout units use their EIN because of the confusion as to who the contributor is giving their money to.

 

Can yeh please provide your source for da statement that "most sponsors do not let scout units use their EIN". I do not believe that information is collected anywhere. And as you've already been informed, churches do not file 990s.

 

"a scout unit is not considered a subordinate to the BSA", thats because a subordinate would be entitled to solicit donations in the name of the BSA, it is just a semantic legality to prevent this from happening. It does not mean a scout unit is not part of the BSA for example units are offered insurance under the BSA corporate umbrella.

 

Yah, this is so completely incorrect it's hard to know where to start.

 

Units are not subordinate to the BSA because da BSA does not own, operate, or exercise control over 'em. That's not a "semantic" anything, that's a little thing called corporate or entity law, and it's a very deliberate part of the BSA's legal risk management program. It definitely does mean that scout units are not part of the BSA, and therefore that the BSA is not liable for their actions.

 

Insurance is completely irrelevant, regardless of whether it's carrying an umbrella or wearin' a raincoat. My auto insurance is from State Farm, that does not mean I'm a corporate subsidiary of State Farm, eh? It just means that I've contracted with State Farm for a service. CO's contract with da BSA for a service which includes general liability coverage.

 

A scout unit is not legally allowed to use a sponsors EIN, that is true since that number identifies only the sponsor, if they do give permission than they become legally responsible for reporting those donations solicited by the scouts.

 

What yeh seem unable to quite understand is that a scout unit under most circumstances is not a separate entity. If a church calls its choir "The Holy Rollers" and contracts with Time Warner for sheet music, that does not mean that da choir is suddenly part of Time Warner or suddenly a separate entity from da church.

 

So if da church calls part of it's youth program "Troop 4567" and contracts with da BSA for support materials, that does not mean that part of its youth program is suddenly owned by da BSA or suddenly a separate entity from the church.

 

Again, the plain language of the charter agreement makes it explicit that the scout unit is the sponsor. "The Boy Scouts of America is an educational resource program. It charters community or religious organizations to use Scouting as part of their service to their own members, as well as the community at large."

 

Not even mired in legalese, that.

 

Beavah