Unit Tax Exempt Status
Tax-Exempt Status of Units and Contributions to Units
Occasionally questions may arise as to a unit’s tax exempt status and contributions to units. The following are frequently asked questions and answers.
Is our pack or troop considered tax-exempt by the IRS?
That depends on who sponsors your pack, troop, or unit. The only time a unit can be considered “tax-exempt” is if its sponsoring organization is also tax-exempt.
The BSA National Council grants a charter to schools, service clubs, religious organizations, businesses, etc. that want to sponsor a Scout unit. A unit is actually “owned” by its chartered organization. Chartered organizations vary widely in tax status, but the tax status of your unit is the same as that of your chartering partner.
Can our pack or troop be covered under the BSA’s group exemption?
No. The IRS only allows local councils (and council trust funds) to be included under the BSA group exemption. Packs, troops, and other Scout units cannot be included under the BSA group exemption because they “belong” to their chartering organization. (Note: tax issues for Girl Scout troops are handled differently by the IRS because of how their cookie sales are structured).
Does a pack or troop need its own tax identification number? If so, where do we get it?
All units need a tax ID number (also referred to as an “EIN” – Employer Identification Number). Units should NOT use the Social Security number of an adult leader. If they do, the IRS will attribute all banking transactions, unit purchases, etc. to that leader as an individual. Units may use the tax ID number of their chartering organization, if given permission. This may be especially useful for the unit if that organization is tax-exempt.
Most units obtain their own tax ID number by completing IRS Form SS-4. The current form and instructions are available on the IRS Web site – www.irs.gov. Also, the IRS now allows you to provide the information over the phone and immediately receive a unit EIN. The IRS “tax ID hotline” is 800.829.4933.