It's up to the CO as to whether it has anything to do with the pack's money. I would say that most COs typically have very minimal interaction. The pack does not have to file income taxes, and most COs don't either.

The assumption I'm making is that your CO is a typical non-profit. If you are sponsored by a for-profit company, the rules may be different. Churches are generally exempt from income tax.

If you do nothing special, you're fine. Just make sure you have multiple people looking at the bank balance regularly. We always had our treasurer review it at our monthly committee meeting.

Your mileage may vary, but my $.02 as a Chartered Organization Representative for 5 units and as Treasurer of my Kiwanis Club:

- As OakTree says, it's up to the CO as to how much involvement (if any) it has with Pack finances.

- If you use the CO's Tax ID Number (TIN) when opening your bank account (with CO permission of course), then I would advise you to at least make sure the CO treasurer knows about this as a courtesy, in case he/she cares.

- If the CO has more than $25K in income, they generally will need to file a Form 990 (at least) with the IRS as their tax return. (I'm no tax expert, and there are exceptions). You can google form 990 for more info. In my case, our Kiwanis tax return is pages upon pages long for various reasons.

- If you get your own TIN for the Pack, then you wouldn't have any filing requirements in the scenario you mention with such a small amount of income (again, I'm no tax expert).

- Finally, a COs tax year may not end on December 31st. If a CO wants an income/expense statement from the Pack so that they can roll those numbers onto the CO's tax return, the request may come in the middle of the calendar year.

Hope this helps and doesn't add to the confusion!

Ohh... So is it correct that a non-profit does not have to file any tax forms at all?

If that is the case, then it would make sense that a pack sponsored by that non-profit CO would not have to file any forms either.

Thanks!
Mimi

You absolutely must file -- everyone and everything must file a tax form. That form might be just a sort of declaration, "By the way, here's how much I made, and now I'll be going back to work and ignoring you again..." It might be a "I/we didn't make enough to have to pay taxes." It might be a "I paid you enough already, now give me some of that money back." It might be a "Whoops, I didn't pay enough, here's more money." But everyone and everything, all people and businesses of all types, are supposed to file something (although that "something" can vary).

Don't give the IRS a reason to come after you and practice transparency (don't do anything secret with the money like try to help out a poorer scout without letting the other scouts or the committee know about it). Bring this question up at your next district roundtable and ask the other units how they handle it. Take an accounting class at your local community college just so you get a better understanding of how exactly to handle these sorts of things -- such a class can't help but benefit you professionally as well, whether you're a mechanic or a large corporate mid level manager or whatever.

don't do anything secret with the money like try to help out a poorer scout without letting the other scouts or the committee know about it

A point of clarification on this: It's none of the other Scouts' business. They shouldn't know about the details of financial assistance. The committee or responsible troop leadership, appointed or designated by the CO, should.

Bart gives good advice...find a resource to get accurate information (or better yet, engage the CO and do what they tell you to do).

For some background...

Here's a link to the IRS website concerning Form 990, which is the form that non-profits file:

http://www.irs.gov/charities/article/0,,id=169250,00.html

In general:
Under $25K in income -- file Form 990-N
Over $25K in income -- file Form 990 or Form 990EZ

Your CO should be the one to tell you how they'd like the Tax ID numbers and tax reporting handled.

"You absolutely must file -- everyone and everything must file a tax form."

In general, people and organizations do file tax forms, but it is explicitly incorrect that everyone and everything must file a form.

From irs.gov, for individuals:You must file a tax return if your income is above a certain level. The amount varies depending on filing status, age and the type of income you receive.

Check the Individuals section of IRS.gov or consult the instructions for Form 1040, 1040A, or 1040EZ for specific details that may affect your need to file a tax return with the IRS this year.And for organizations like churches, from Publication 1828Exceptions to file Form 990, 990-EZ and 990-N
The following is a list of some of the organizations that are not required to file Form 990,
990-EZ or 990-N.
■ Churches (as opposed to religious organizations, defined earlier)
■ Inter-church organizations of local units of a church
■ Mission societies sponsored by or affiliated with one or more churches or church
denomination, if more than half of the activities are conducted in, or directed at, persons
in foreign countries
■ An exclusively religious activity of any religious order
See the form instructions for a list of other organizations that are not required to file.On domestic partnershipsA domestic partnership must file an income tax form unless it neither receives gross income nor pays or incurs any amount treated as a deduction or credit for federal tax purposes.

Thanks, everyone, for your input.

So it sounds like the CO has some say or will give advice regarding filing income tax forms (990's)? Another reason to have a CO....

Can anyone clarify for me why a pack has to file at all, if it is owned by a CO?

Thanks again for everyone's help!!
Mimi

If a pack is using the Tax ID number (TIN) of the CO, then it should not file. In a perfect world, the CO would get the income/expense numbers from the Pack and then roll them into the CO's tax return. Many times, however, the CO just ignores what's going on with the pack with regard to taxes for a variety of reasons.

If a pack is using it's own TIN that its applied for (because the CO doesn't want the pack to use it's TIN or for whatever other reason), then the Pack *should* file a tax return to keep the IRS happy. Most likely the postcard form 990-N is what's required.