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Every unit will eventually need to have a checking account. Sometimes this gets confusing for the newly organized unit because banks demand a federal tax number to open an account. Do not 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.”
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. (Note: in the past decade there have been 1 or 2 exceptions to this). 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.
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)). The responses listed below no longer match up line for line, but do provide typical SS-4 responses for the IRS site.
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.
If you are filing by mail it will take 30 days turnaround.
The mailing address is:
You may file by faxing the SS-4. You will probably experience a 5-day turnaround. Be sure to request a fax back. The fax number is (215) 516-3990.
File by phone by calling 1 (800) 829-4933 to “complete” Form SS-4 and receive your EIN immediately.
Additionally, there is an online option for filing 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.
Once equipped with your EIN you are well on your way to getting a checking account established, but the bank will want some additional documents like minutes from your committee meeting showing who was voted to accept the role of treasurer and who has signatory authority. Other items include a copy of your charter and an official print out of adults. The EIN, charter, minutes and roster are the items most frequently presented to the person establishing new accounts.
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 may not have 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 most banks accept those items discussed in the first paragraph of this segment. If your explanation 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 Buffalo Trail Council does not dictate bank policy, but we can help explain your situation should there be any confusion at the bank.