Scouting (Boy, Cub, Girl)/New pack treasurer, past tax issues
I'm the new pack treasurer for our elementary school Cub Scout pack, which is sponsored by the PTA.
I've discovered in cleaning up past poor recordkeeping that our pack has no EIN, and has not filed any tax returns for nine years! Our PTA has not extended their group exemption to us, and has not given permission to the Cub Scout pack to use their EIN. The PTA has not included the pack in their 990 forms -- ever. The tax id number on our bank account deposit agreement is some weird made up number, not an EIN or SSN.
So, I'm the treasurer of a pack that is operating as a tax-exempt entity, and yet has never filed any tax returns in 9 years of existence! The first treasurer 9 years ago did something inexplicable to open the bank account we're using without a proper tax id. I am freaking out! No one else thinks this is a problem.
Am I nuts, or is everyone else running the pack and PTA incompetent?
I am not a tax expert nor do I play on the internet but here is my opinion.
You may or may not be nuts, since I have never met you and can't make that judgement... (chuckles).
It is not a problem because you are not a tax entity under the IRS code. You are a part of the PTA which is a 501(c) organization.
Take a look at the Annual Charter Agreement...
The pack is an extension of the PTA which is a tax free organization.
Technically any money that you raise really belongs to the PTA and should you close the unit all money and gear belong to the charter organization. If you tried to move the Charter Organization and you had a million dollars in the back, you would have to leave that money with the CO and start the new unit with no money.
In the real world this is likely not to happen as most CO's do not exercise their rights under the Annual Charter Agreement and exercise very little control over the unit.
As far as the checking account, you can not legally get a EIN so in order to open an account you would need to use their EIN, some CO's may object to this but it is the way it would have to be done.
Our CO is a church and as Scoutmaster I am technically the same as a volunteer youth pastor. If the church wants to replace me, they can with no reason. If they want to take all of the money from our checking account and use it for other church purposes, they can.
Now if they in fact did that, it would certainly cause hard feelings in the unit. This is a good reason for not carrying a large balance in your unit. If you have between a $1,000 and a few thousand they are probably not going to be interested in causing these kinds of hard feelings. On the other hand if you between $20,000 to a million dollars in the bank at the end of the year then the CO might begin to take notice.
As far as the EIN and the bank, I would not worry about it unless the bank is worried.
I hope that this answers your question.
Scoutmaster Troop 43