Every unit will eventually need
to have a checking account.
Sometimes this gets confusing
for the newly organized unit
because the bank demands a
federal tax number to open the
account. You would not want to
use your social security number
for this purpose because all
financial transactions are
attributed to the individual
unit leader providing his or her
Social Security number. This
obviously could pose problems!
Here are two approaches. We
will start with the fastest
method “Plan A.”
Plan
A
Due
to the charter agreement and tax
laws, Units are “subordinate” to
your chartered partner. Some
chartered partners are willing
to allow units to use their tax
number so their unit will be
able to obtain a checking
account. This is perfectly
legal, but some chartered
partners have concerns. If
your chartered partner does not
feel they can help you in this
fashion, don’t worry. Go to
Plan B.
If
your chartered partner is a
business, public school or PTO
go straight to plan B without
presenting the Plan A concept.
Plan
B
This
is the best plan to follow when
you are faced with the need for
a checking account (the bank
needs a federal tax number and
your chartered partner doesn’t
feel they can help you
accomplish the task). What
follows are specific
instructions for units (Packs,
Troops, Posts) to complete IRS
form SS-4 (Application for
Employer Identification Number (EIN)).
If you are opting for this
approach it is important for
this SS-4 Form to be carefully
completed according to
instructions.
Several options are available
for fast processing at the end
of this document.
Instructions.
Please review the IRS
instructions completely and
follow the specific BSA
instructions as follows:
Line 1 –
Name of chartered organization
(legal name of applicant) and
unit designation; e.g.: First
United Methodist Church
Pack/Troop 151.
Line 2
– Normally not applicable
Line 3 – “Care
of" name (Unit treasurer,
committee chairman, or chartered
organization representative).
Lines 4, 4a –
Mailing address, city, state,
ZIP code.
Line 5 and Line 5a –
Address, if different from Line
4.
Line 6 –
County and state.
Line 7a, 7b –
Name of principal officer,
grantor, or general partner (use
chartered organization
representative or committee
chairperson, and their tax ID
number.
Important.
Before you fill in Block 8a,
Type of Entity, remember
that the national office issues
charters directly to local
chartered organizations and not
to units. Units should ask
their chartered organization
for permission to use their
EIN if at all possible.
Block 8a Type of Entity –
Most units will check one of
three boxes:
a.
“Church or church controlled
organization”, if chartered
organization fits this
description.
b.
“Other nonprofit organization
(specify)”, if unit is chartered
to a nonprofit organization
other than a church.
c.
“Other (specify)”, if chartered
organization is not a church or
other nonprofit organization –
just put Boy Scout troop, Cub
Scout pack, etc.
If
your unit's chartered
organization has a GEN (Group
Exemption Number) that the unit
is permitted to use, put that
number in this section. Note,
however, that the Group
Exemption Number used by BSA
local councils may not be used
by a unit.
Line 9 –
Check appropriate reason (one
only) for applying. Most units
will check banking purpose
(specify) interest account, etc.
Line 10 –
Leave blank.
Line 11 –
Enter closing month of unit
accounting year (most units
will use charter expiration
month).
Line 12 –
Leave blank.
Line 13 –
Leave blank.
Line 14 –
Check “Other” and put “Youth
program character development”
or similar statement.
Line 15 –
Put “N/A”
Line 16a –
Check appropriate box.
Lines 16b and c –
As needed or leave blank.
Third Party Designee –
Give name and unit position of
the contact person, such as the
chartered organization
representative or committee
chairman.
Important.
Remember that the tax-exempt
status of a pack, troop, or post
is consistent with the tax
status of the chartered
organization. The employer
identification number does
not provide
tax-exempt status it provides
identification!
You
will receive a letter from the
IRS that includes your
organization name and address,
and your EIN. You also may
receive other forms, such as
Form 1023, Application for
Recognition of Exemption,
under Section 501(c)(3) of the
IRS code.
Your
units should not
use Form 1023 to apply for
recognition of exemption. Among
other reasons, this is due to
the normally prohibitive cost,
and the requirements for your
unit to provide articles of
incorporation or articles of
organization with the
application, annual Form 990
filings, minutes of meetings and
annual audits, many other
compliance items and penalties
for non-compliance.
Filing Options
If
you are filing by mail it will
take 30 days turnaround.
The mailing address
(For
Indiana and Michigan)
is:
Internal Revenue
Service
Attention: EIN
Operations
Cincinnati,
OH
45999
You may Fax the SS-4 you
will probably experience a 5-day
turnaround. Be sure to
request a Fax back. The Fax
number is
859-669-5760.
"Complete" Form SS-4
over the phone,
and receive your EIN immediately.
Call 1 (800) 829-4933.
Additionally,
there is an
online option of the
SS-4
available that also offers
immediate filing and approval
capability.
For
more information and a copy of
the most current Form SS-4,
please visit the IRS website,
www.irs.gov.
Thank you for all you do on
behalf of Scouting in your
community.
We have the EIN but the
Bank wants more! What do we do?
Banks offer commercial accounts
and individual accounts.
Your unit account would not be
personal so therefore it falls
under a
commercial classification. The
bank employee working in setting
up your account is probably
accustomed to commercial
accounts but probably has not
dealt with unit accounts. This
is why they often will request
articles of incorporation,
bylaws, officers, DBA and a host
of other paperwork that you do
not have. Don't worry.
Explain that this is a unit
account for Scouts and all that
should be needed is the EIN. If
your explaination is not
accepted please ask to speak
with the branch manager or
officer within the bank that can
help render a
decision. Of course, The
LaSalle
Council does not dictate bank
policy, but we can help explain
your situation should there be
any confusion at the bank.
Please ask bankers to call
Council
Treasurer Mike Flowers
574-233-2332 for
support.
Incidentally, some banks offer
free checking
(1st Source and Horizon Banks in our area). If you know of
any
please advise and we will add
them to the list.