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Donations

CRKT recently donated some of the Nathan’s Knife kits to our group and gave us discounts on future purchases. I offered the information up to a scouting group and was immediately told that it is against BSA regulations. Can anyone point me to this policy or give me more information as to why the company would not be allowed to provide us with these.

As a note, I met with one of the representatives at a local show and he advised me to reach out to customer service as they have programs for scouts.

Scout units cannot solicit donations but can accept them if offered. If you went to the company and said “Can you give my pack some knife kits?” that would be prohibited. If a representative of the company came you you and said “I see you are a Scout leader. Would you like some free knife kits for your Scouts?” you could accept them.

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Thanks Ed, we did not solicit, we were given contact information from a sales rep to reach out. I am sure that is somewhat of a grey area.

I believe companies and other organizations can give tax-deductable cash and non-cash gifts to BSA councils and certain types of non-profit chartered organizations.

The following are germane:

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My post was flagged as inappropriate and it was removed. The community felt it was offensive, abusive, or a violation of our community guidelines.

I read the guidelines. It did not violate them. My comment was not offensive or abusive.

Enjoy your Independence Day everyone.

Your post was contrary to specific fund-raising rules established by the BSA. You don’t need to complain about the moderators or their decision making.

Bill,

I just discovered our Pack EIN has expired. We are overseas. What is the benefit for a Pack to keep an EIN?

EIN number with the IRS shows the organization is tax exempt organization like a 501c. Does this allow for those who want to donate, to donate larger sums, legally?

Very Respectfully,

Scott

Scott,

I am not a tax lawyer. You will have to ask the IRS or read the IRS publications. If your pack is on a military base you may need to ask the family support or recreation folks, or a base lawer for advise.

Apparently there are tax benefits for giver depending upon the tax status of the chartered organization or pack (if they have their own EIN).

If you establish a pack bank account with a US bank, it needs an US tax identification number of some type.

I suspect, unless the pack can be tax exempt because it is overseas, having an EIN keep the pack out of trouble with the IRS.

There are other factors that may come into play. For example is the unit sponsored by the US Government. If the sponsoring organization is a for-profit company having the pack with a separate EIN with a non-profit status may have tax benefits.

I understanding is that an EIN is like an SSN It is just an ID numbers used as a tax ID number (TIN) by non-individuals. I do not know how you can lose one. If the type of organization changes, I do not know if the IRS requires a new EIN.

A pack bank account should not be not be a personal one. If it is, the donations may be taxable as income on the individual’s tax return.

The Cub Scout Leaders Book (2018), Financing the Pack, Handling Money, p 102, states in part:

Pack Bank Account. The pack’s back account is established by the chartered organization and it the responsibility of the pack’s treasurer to maintain. …

Establishing a Pack Bank Account. …
Preferred. The preferred situation is for the chartered organization to established a bank account associated with the organization in the name of the unit …
Acceptable. In the event the preferred approach is not possible, units may establish their own back accounts. To do so, unit will need to establish a tax ID number (EIN). Most units do this by completing IRS Form SS-4. There is no few involved. The current form and instructions are available on the IRS website (www.irs.gov). Also, the IRS now allows you to provide the information over the phone and immediately receive a unit EIN. The IRS phone number is 800-829-4933.

I suspect the 800 number provided by BSA is not usable outside of the U.S. For contact and other information see:

If you have an EIN for the pack I believe you can also contact the IRS online.

Bill

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Scott,

I’m a CPA and have been engaged in tax practice since 1988. EINs do not expire.

The IRS will deactivate and EIN when the entity to which it is assigned is dissolved (or deemed dissolved) or the individual to whom it is assigned dies. (Individuals need an EIN, if they have employees they pay personally. These may be people employed as part of the individual’s business as a sole proprietor or as household employees.) An entity may be deemed dissolved under unusual circumstances, Most commonly, this happens with certain types of trusts which outlive their creators. The IRS considers the trust to have ended at the moment of the creator’s death and a new trust to have come into existence immediately afterward, even though the trust’s legal existence was uninterrupted. This doesn’t happen with all trusts but only with certain types.

Something else is wrong, because if the organization to which the EIN was assigned still exists, then it still uses the same EIN.

The IRS maintains a database of organizations to which deductible charitable contributions may be made that is searchable by EIN. If your pack’s EIN has been removed from the list, anyone donating money to your pack may not claim a charitable contribution deduction. However, people can still legally donate money to the pack (unless it has been designated a terrorist organization or categorized in some way as an illegal entity). I don’t say that to be a wiseguy. Things like that happen when mistakes are made.

The most common reason a 501( c )(3) organization is removed from the list is failure to file required reports. A single failure will not do it, so if this is the reason for removal, it has gone on for an extended period of time and not been addressed. However, it is pure speculation as to the reason.

The IRS would have sent notices to the organization before taking this action. It is possible they were sent to an old address where the pack can no longer receive mail. This could be a corporate services company, an attorney’s office or the address of a former volunteer.

Most BSA units don’t need their own EIN. If the chartered organization is a section 501( c )(3) organization, the pack’s accounts can be set up as accounts of the organization, and donations can be deducted by contributors based on having been made to the chartered organization (or one of its youth programs, i.e. Scouting).

If the chartered organization is not a section 501( c ) (3) organization, a BSA unit can apply for its own EIN and for status as a 501( c ) (3). That would allow donors to the unit to claim charitable contribution deductions. It also may afford the unit other benefits like exemption from sales and use tax in some states or exemption from property taxes. An example of a non-501( c )(3) that might charter a BSA unit would be a chamber of commerce. While such an organization may be generally exempt from income tax, it is not formed for charitable purposes and those who make contributions to it may not claim charitable deductions (but may be able to claim business deductions, if the situation warrants).

I suggest you have someone authorized to act on behalf of the organization contact the IRS and try to find the source of the problem.

Peter

P.S. I had to put a space before and after the c, separating it from the parentheses, because, if I didn’t, it renders like this: 501©(3), and there’s no way to change it.

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Gentlemen,

Thank You so much for a wealth of information! I have some experience with EIN’s from a political party that I also run. I am the new Committee Chairman, so it will be on me to update the records if they can be found. I have the EIN, but when I ran the searched on the IRS website it came up with no results. Our pack and between 75% and 100% turn over of leaders every year due to military change of station orders. Last year Key 3 were close to closing the Pack down like the sister pack that was closed years ago, but they ended up recruiting enough to make JTE Gold. All of them are now gone so it is up to the new crew to build on that success. I find it amazing that this Pack has lasted near 30 years now.

Very Respectfully,

Scott

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