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  • #91
    Just to be clear, no one here actually knows for certain (e.g., is a tax lawyer) what is, is not allowed, right?


    Point being, I see a bunch of opinions logdge here...which is great...but nothing that is a clear directive of what is/is not allowed under the law.

    Comment


    • #92
      When a Scout leaves a Troop, does he receive a Troop written check as reimbursement for his ISA in the amount reflecting the total he earned for selling xx dollars of xx product during the Troop-wide fundraiser?

      Does it matter whether he leaves voluntarily or involuntarily?

      What is the correct, legal, and ETHICAL thing to do with such a check if it is received, unprompted, and is notated on the memo line as individual Scout fundraiser credit reimbursement?

      Comment


      • #93
        We do not allow Scouts leaving the Troop to take their account with them. The funds usually revert to the Troop general fund, although I can see a situation where a one brother "donates" his Scout Account balance to a younger brother, or donates it to a Scout in the Troop he knows is having financial difficulties.

        If my son received the kind of check you describe, he would be likely to write one back to the unit for the same amount as a donation.

        Comment


        • #94
          Originally posted by scoutergipper View Post

          If my son received the kind of check you describe, he would be likely to write one back to the unit for the same amount as a donation.
          it would be better just to hand back the original check. That way actual ISA money hasn't entered his checking account

          Comment


          • #95
            http://www.eidebailly.com/industries...sing-accounts/

            http://www.irs.gov/Charities-&-Non-P...-Organizations

            Remember, it's not the unit or the council holding the 501(c)(3), it's the chartering organization that will take the hit from the IRS.

            Stosh

            Comment


            • #96
              The only one who knows for certain is the judge in tax court hearing the case. Even the IRS isn't final. We're here trying to hash out solutions that seem to fit within the guidance the IRS has put out, the Forbes article - with decent advice, and BSA's new policies that aren't publicized.

              Quick point on this, there are two questions here:
              1. What is the "right thing to do"?
              2. What is the practical reality?

              The reason that these both matter is that as Scout Leaders, and trustworthy, we have to stay within the letter and spirit of the law (#1). We also have to protect our Charter Org from the IRS (#2).

              I have no idea what the IRS would say regarding my structure (#2), but I think that the likelihood that they would swoop in, audit the Synagogue, and fight the Synagogues 501c3 because they think my incentives were slightly too large pretty close to 0, so I'm okay. However, I still need to met #1, am I staying within the IRS/BSA guidelines.

              As a result of this discussion, I'm revisiting how I'm going to structure my popcorn "sales requirements" for the Pack to cover your attendance. I think we can keep the numbers manageable for parents to not get scared, and let the boys "earn their way", while keeping the incentives in line with normal non-profit operations, and in the "de minims" and "recognition" realm.

              Thanks to everyone for the help here.

              At our troop level, none of the parents care about costs, whether they pay $30, $35, or $50 for a camp out, they don't care. At our pack level, $15/person vs $35/person is $100/family, that matters.

              Comment


              • #97
                Originally posted by mozartbrau View Post
                Just to be clear, no one here actually knows for certain (e.g., is a tax lawyer) what is, is not allowed, right?
                Our RT commish said he talked to tax people and other lawyers, so I've been trying to relay the thinking that he learned. Nobody said troops with ISA's of the magnitude we're talking would be of any concern.

                Problem with tax rulings: they allow "wiggle room." But, on this end it sounds like we're playing a big game of "hot potato"!

                Comment


                • #98
                  Originally posted by qwazse View Post

                  Our RT commish said he talked to tax people and other lawyers, so I've been trying to relay the thinking that he learned. Nobody said troops with ISA's of the magnitude we're talking would be of any concern.

                  Problem with tax rulings: they allow "wiggle room." But, on this end it sounds like we're playing a big game of "hot potato"!
                  Oddly enough I have heard the same thing, from a similar source with a very different answer.

                  Funny how that works.

                  Comment


                  • #99
                    I just don't even understand how anyone can even define a Scout Account. I mean we set money aside for use by the boys based on their fundraiser participation and success. That money is not "theirs" to keep, but if they need something we will buy it for them or reimburse them if they buy it out of their own pocket.

                    I mean instead of calling it a Scout Account (which is what we do call it because of ease of explanation) I could just say that I am the treasurer and if you need to pay for something ask me and I will decide if the pack will pay or not (basing it on those fundraiser numbers and how much money the boy brought in that i know about). But at the end of the day it wouldn't be an ISA, but just a random decision of mine if we paid for it or not.

                    I really don't see how the IRS could tell the difference ? After all the scout account stuff is one page in my spreadsheet which doesnt need to be there for my bank account and records to be correct.


                    Comment


                    • Originally posted by jc2008 View Post
                      I just don't even understand how anyone can even define a Scout Account. I mean we set money aside for use by the boys based on their fundraiser participation and success. That money is not "theirs" to keep, but if they need something we will buy it for them or reimburse them if they buy it out of their own pocket.

                      I mean instead of calling it a Scout Account (which is what we do call it because of ease of explanation) I could just say that I am the treasurer and if you need to pay for something ask me and I will decide if the pack will pay or not (basing it on those fundraiser numbers and how much money the boy brought in that i know about). But at the end of the day it wouldn't be an ISA, but just a random decision of mine if we paid for it or not.

                      I really don't see how the IRS could tell the difference ? After all the scout account stuff is one page in my spreadsheet which doesnt need to be there for my bank account and records to be correct.

                      Gotta love the "Second Set of Books" accounting system going on here. It still sounds like the boys get paid for participating in fundraising and thus a 1099 is in order.

                      Stosh

                      Comment


                      • Originally posted by jc2008 View Post
                        .... instead of calling it a Scout Account (which is what we do call it because of ease of explanation) I could just.... basing it on those fundraiser numbers and how much money the boy brought in that i know about. ... I really don't see how the IRS could tell the difference ? After all the scout account stuff is one page in my spreadsheet which doesnt need to be there for my bank account and records to be correct.
                        A rose by any other name ...

                        No matter what you call it, you are accounting for individuals' fundraising and crediting their access to pack funds in proportion to what they've raised. The only question is: does that accounting exist for the boy's parents' personal benefit, or does it enable the boy stewards over some pack funds for the pack's benefit?

                        Comment


                        • Well, an update. Our unit found a tax lawyer who is a Boy Scout leader and spent 20 years as an IRS auditor. He's helping the unit to set up our fund raising program and literature to stay compliant with this new development. According to him, we can still keep out account system, boys can still raise funds for their own purpose....all with only minor modifications to our process, sales pitch and documentation. And he's doing it all pro bono. So if a small unit in the western US can do that, why can't BSA?

                          Comment


                          • mozartbrau: Tread carefully. Watch the sales pitch. Per BSA guidelines it needs to go a certain way, which may be at odds with the legalese devised by the scout lawyer. review for substance over form.

                            Comment


                            • Originally posted by koolaidman View Post
                              ... it needs to go a certain way, which may be at odds with the legalese devised by the scout lawyer. review for substance over form.
                              Agreed. Doing what is ethical and right for this country trumps what BSA does to protect their assets.

                              Comment


                              • Originally posted by koolaidman View Post
                                mozartbrau: Tread carefully. Watch the sales pitch. Per BSA guidelines it needs to go a certain way, which may be at odds with the legalese devised by the scout lawyer. review for substance over form.
                                Given this guy knows all three sides of the issue (IRS, Scouting and unit) we are in good shape. It also jives with direct feedback we have gotten from Council. District is clueless. They say to stop fundraising altogether...and yet want us to sell their silly product each year...go figure.

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