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Unit applying for EIN/Tax ID

My unit is chartered to a Catholic church in a diocese that in April of this year directed its parishes to notify their affiliated organizations (including but not limited to scouting units) to discontinue use of the Diocesan EIN. All units in the diocese including mine should be in the process of applying for their own EINs using IRS form SS-4. We have two immediate concerns:

  1. The “Responsible Party” fields (Lines 7a, 7b) on the SS-4 requires us to list an individual. Our council recommends either the Chartered Organization Representative or Committee Chairperson be entered here. What sort of tax liability or other risks should this individual be prepared to accept?

  2. By being assigned its own EIN, will the unit lose the non-profit status it had enjoyed through use of the Diocesan EIN? Aside from needing it to open a unit bank account, we had used the Diocesan EIN to verify eligibility for discounts available to non-profit organizations (e.g. campsites at county parks) as well as technology products such as Google Workspace for Nonprofits.

Thanks in advance for sharing any experience or insight you may have with one or both of these issues.

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Honestly, I would reach out to your diocese for more guidance on exactly what they are asking for, and possibly hunt down a tax accountant/attorney to clarify what the issues that come up would be.

My understanding is that units are wholly-owned by the chartering organization (presumably, in this case, the parish), so I’m not sure what tax “identity” they could have outside of the church. The tax status generally devolves from the chartering organization’s status, so I would (again, as a lay person) expect that any non-profit status would be lost if the unit uses a different tax identity.

Again, all of this seems like questions complex enough to warrant seeking professional advice.

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I’m surprised that the parishes don’t have their own EIN since, at least in MN, they are legally distinct entities from the diocese. Could the directly simply be that affiliated organizations need to use the parish’s EIN instead of the Diocesan EIN?

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There are at least two tax categories to consider here: state sales tax and federal reporting (primarily for donations)

The EIN is a federally-issued number. You would have to file as your own non-profit to get one. That’s a fair amount of hoops to jump through. Also, it not not recommended by BSA (not prohibited, though :wink: ) You use the federal number on donation receipts provided to the donor for federal tax purposes.

For state sales tax, call your State Department of Revenue (DoR). Most states issue a state sales tax exemption certificate with a state-issued number, different from your EIN. When you make purchases for your Scout Troop, these can qualify for a state sales tax exemption. In our state, the DoR mandates that Scouting units use the State Tax Exemption number of our local council. This drives our council nuts. I don’t know why, because it is the state that issues the number and sets the rules for its use…

And this issue is like asking for legal advice…ask five lawyers the question and you get ten different opinions :wink: Good luck!

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For whatever reason, in our diocese there is a single EIN belonging to the diocese that all the parishes share. The directive to discontinue use of the diocesan EIN came down from the Bishop through our pastor who unfortunately does not have any say in the matter.

Have you spoken with your Scout executive regarding this?

With due respect for and to any DEs here, I would skip guidance from the entry level position and get qualified information from the top as it’s highly likely there’s other units in your council that are in the same boat.

From my research, as a committee member of a unit in the same Diocese:

As a result of our signed charter, the troop is a subordinate organization of the Diocese.

Thus, for the duration of our charter:

  • The troop shares the Diocese’s tax exempt status through Group Exemption: (Unlike other business entities, churches are not required to file the paperwork related to subordinate organizations for Group Exemptions.)

    • There is no personal tax liability for the volunteers.
  • Subordinate organizations have their own EIN number distinct from the central organization’s EIN number.

    • Every EIN number must be tied to an associated “responsible party”.
    • For a non-profit subordinate organization, the “responsible party” is the principal officer, defined as the “person who has ultimate responsibility for implementing the decisions of the organization’s governing body, or for supervising the management, administration, or operation of the organization.”
      • In the case of a BSA Troop, that would be the Committee Chair.
    • While the “responsible party” does have to submit their social security number as part of the EIN application, it is supplied for identification purposes, not tax liability purposes.
  • The troop must file form 8822-B every time it changes its Committee Chair in the future.

Edit: Disclaimer…This is just my understanding based on my research. I could be totally wrong about all of it.

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Joe thank you for this great information! Can I have my CC reach out to you offline for more specifics on what your unit is doing? If okay please send your contact info to committee+forums@svtroop41.org

I would say that they Charter Organization executive officer or charter Organization representative would be

Since the troop is owned by the chartered organization and the charter rep has the ultimate say in who will be allowed to be adult leaders in that unit I would lean towards them. That is just my 2 cents anyways.

As a CPA who deals with non-profits and youth organizations I’m asked about this issue several times a year. The three issues to consider are ownership of the unit, the need for an EIN, and who the IRS considers to be the responsible party.

The reason many charter organizations ask their units to secure their own EIN is to provide a level of separation between the charter organization’s finances and the unit’s, since charter organizations rarely review the financial activity of the unit. That said, ownership of the unit (and responsibility for) is held by the charter organization.

When completing the SS-4, check the box on line 9a indicating an organization type of Other and indicate the type of Scouting unit (Pack, Troop, Crew, Post). On line 10 indicate that the number is for banking purposes and list checking account as the reason. On line 16 select Other and indicate youth organization. On line 17 indicate youth organization.

I generally ask the COR or the Committee Chair to serve as the responsible party. There is a level of liability associated with providing your name and social security number, but it’s minimized if the unit complies with BSA rules.

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Organization relationship with the BSA Council

Please note that the opinions expressed in this discussion are not necessarily those of the Boy Scouts of America.

In BSA databases the charter organization executive officer (IH) may or may not be the same as the charter organization representative (CR)

BSA references:

Some previous discussion:

@BobC

Thanks! What would you recommend in box 1?

JamesMayled,

I would hold off on this for a bit. There have been a lot of units with these same questions, and they have now been submitted to the Diocese for clarification. Specifically, they are looking for clarification on usage of the Diocese’s Group Exemption Number on this form.

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contact your council or district . do not get this on your own , the unit is part of the chartered org and is not a separate entity . that is part of the agreement when they charter . you will open yourself up to all kinds of issues .

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Lots of good information here. I just wanted to point out that a EIN/TIN # does not confer non-profit status or an exemption from state and local sales tax. Consider what you’re trying to accomplish and move slowly. There are lots of volunteer CPAs and lawyers in every council. This is a big enough issue that I would move very deliberately.

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We had to do this for our Charter because the Charter Organization is the City of Columbus Division of Parks & Recreation. But in 2021 they declined the updated Charter Organization document and then accepted it for this year only and would not in 2022. We are likely seeking another COR or forming a COR NonProfit LLC (last option) next year. I know other units in other dioceses have followed the non profit path to ensure their local programming continues including a unit that was chartered for 50 years to a Catholic Church.

I know the COR document this year is driving a more clear separation between COR and unit. Next year, we will just end up being a lessee of space.

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