Re: 3 tax questions
Sam McNamee (smcname@MANU.COM)
Tue, 27 Apr 1999 11:51:43 -0400
>> 1. Our Treasurer has been told by HR Block, that if our checking account
has over $$$ in DEPOSITS (I'm sorry, I cannot remember the figure although
it was rather large) than even as a non-profit, with a correct tax exempt
id, we would be required to file form ######????(you don't expect me to
remember this number do you?) It is supposed to be a federal, not state
form. <<
Yes, non-profits are required to file a form 990 or 990-EZ (and a few other
forms) depending on their average income and their income for the current
year. I did this for three years for our PTA and it is no fun. However,
I've been told in Scout training that our Congressional Charter provides us
an exemption from this requirement (I'm not a tax lawyer so please check
that out carefully). I also believe that the troop doesn't own anything,
that your checking account actually belongs to your chartered organization
and therefore they should be filing any required tax forms.
>> 2. For years I have "heard" that a units accounts should equal "0" at
the
end of its fiscal year. That your accounting should show a zero balance.
I have never seen this happen. Nor have I seen it (As I so Like to
express):) in writing <<
This falls squarely in the "urban legend" category. Some will tell you
that this is the only way to qualify as a non-profit organization. That is
wrong -- you certainly can have an excess of income over expenses in any
given year, provided you don't distribute that as a dividend to
stockholders and provided you don't intend to operate at a profit every
year. Look in the SM Handbook -- it describes the need to build up a
surplus in your account and tells you ways to accomplish that.
>> 3. Can anyone tell me what a units "Fiscal year" is? Is it charter
year?
Is it calendar year? Is it the same as our councils fiscal year? <<
The fiscal year is simply the time period over which you keep your books
and over which you budget. For tax purposes, it is the period over which
you report your income and expenses. You can make your fiscal year
whatever you wish -- the calendar year, the charter year, June - May or
September-August (to align with school years which often define the program
year). If you file a tax form, you declare your fiscal year when you first
file, then must go through considerable administrivia to change it later.
