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National Office offers guidance on individual Scout accounts

An excerpt from Bryan on Scouting, December 3, 2014:

"Despite what you might’ve heard, the Boy Scouts of America’s rules do allow for individual Scout accounts.

But it’s not that simple. And the explanation won’t be as black and white as you’d like.

That’s because the IRS rules governing things like individual Scout accounts have a lot of gray areas. All the BSA can do is help you make sense of those guidelines.

Start by listening to the December 2014 CubCastExternal Link. In it, Steve McGowan, General Counsel for the Boy Scouts of America, explains individual Scout accounts and how they fit into IRS rules.

Sales of popcorn, camp cards and the like are an important part of Scouting, McGowan says. They teach Scouts to be thrifty and to manage money. They give families who might not otherwise be able to afford Scouting a chance to experience it.

But money earned from fundraisers must primarily be used in a way that benefits the entire unit, McGowan says. The nonprofit status of the BSA and of the unit’s chartered organization is at stake.

Here’s a nice explanation from McGowan in the podcast:

An example would be if a Scout is part of a unit, and the unit raises money to offset the costs of Scouting for the entire unit. Nothing wrong with that. If they use it as a means to pay down the cost for the unit and each member to go to summer camp, nothing wrong with that.

On the other hand, when you move over to the other side, and a Scout goes out and sells a lot of popcorn, and the unit designates that money that he raises to be used only for that Scout and only for activities that benefit that Scout, we get into an issue of whether or not the IRS would consider that to be a substantial private benefit.

The IRS isn’t going to go after the typical young Cub Scout that’s selling popcorn, and it helps to pay for his uniforms or helps to pay for his summer camp. But to the extent we have people that are raising significant funds, and those funds are being used for costs that would normally be parental obligations in connection with Scouting, we’re getting into an area where the IRS has been and is paying more attention."

 

To read the entire article and to listen to the Podcast follow this link:  http://blog.scoutingmagazine.org/2014/12/03/individual-scout-accounts/External Link

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