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Juniata Valley CouncilResourcesClarifying Unit Tax-Exempt Status

Clarifying Unit Tax-Exempt Status

 

We would like to clarify the federal tax status of Boy Scout packs, troops, crews, and other Scouting units, in response to questions we have received.

 

The IRS recognizes the Boy Scouts of America National Council as tax exempt under IRC Section 501 (c)(3). This tax exempt status extends only to BSA local councils and their trust funds. It does not extend to or include Scout packs, troops, crews, or other Scouting units. Scout units are not considered subordinate organizations of the BSA, they are not included within the BSA group exemption, and they are not entitled to use the BSA's Group Exemption Number ("GEN"). This is an IRS rule.

 

Scouting 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 pack, troop or crew's chartering organization is a church (and tax exempt), the pack, troop or crew could be considered tax exempt only if the church let the troop use the church's EIN, or the pack, troop or crew‘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.

 

Gifts designated for a specific unit should not go to the local council. This includes gifts from corporate charitable incentive plans and employee matching grants programs.

 

Remember also that Article XI of the BSA Charter and Bylaws states that "Contributions shall be solicited in the name of the Boy Scouts of America only through or by the authority of the Corporation and shall be limited to the National Council or chartered local councils...". Similarly, the BSA Rules and Regulations gives each council the power to "control the raising and expenditure of all funds for local Scouting work in their jurisdiction." As such, attempting to incorporate a Scout unit as a separate tax exempt entity is strongly discouraged as a potential conflict with BSA rules and bylaws.

 

We hope this information is helpful, and thank you for all you do for Scouting.

If you have a question, comment or suggestions, please E-mail:  Jim Kennedy

Juniata Valley Council, BSA, 9 Taylor Drive, Reedsville PA 17084  (717) 667-9236(voice)  717-667-9798 (fax)