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Chartered Org Tax Exempt Status

It recently came to my attention that our chartered org had it tax exempt status revoked some time ago because of a failure to report. How could this affect our Troop?

I’m not a professional in that area, but I do know that units derive their tax status from their chartered organization, not from the BSA at large. Presumably, if your charter is no longer tax-exempt, the unit can no longer claim tax-exempt status for their expenditures/donations. I’m not aware of any requirements that a chartering organization be tax-exempt.

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Mostly just prevents you from making tax exempt purchases. Otherwise, no change.

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You also don’t have to worry about whether scout accounts will jeopardize your CO’s tax exempt status.

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And your leaders won’t be able to claim out of pocket expenses as itemized deductions on their personal tax returns.

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Anyone making a donation to the troop will not be able to deduct it. As @jacobfetzer said, that includes out-of-pocket expenses incurred by volunteers.

As a taxable organization, the deductibility of all your unit’s spending is questionable. These may not be ordinary and necessary expenses in carrying on a trade or business. In contrast, dues your Scouts pay would be gross income for your chartered organization. So, would donations anyone makes that are deposited into the unit’s account.

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