1. Fundraising, Individual Scout Accounts, and IRS Changes

2. Change to IRS Compliance Environment IRS shift in interpretation under Lois Lerner –Non-profit organizations must not be organized or operated for the substantial benefit of private interests –If an organization engages in an private benefit transaction an excise tax may be imposed on the person and any organization managers agreeing to the transaction –If an organization raises money to pay for goods and services outside its expressed purpose, non-profit status may be revoked

3. The Basic Issue Conflict with the IRS occurs when individuals want to be able to keep and use what they earn fundraising versus the whole unit benefiting.

4. Compliant Scout Accounts A scout may not receive a dollar for dollar credit from fundraising for their sole benefit Funds raised by the unit may not be transferred to the Scout or another unit at separation, but may be reassigned to units sponsored by the same chartered organization Significant individual account funds may not be used for costs that would normally be parental obligations in connection with scouting

5. Areas of Ambiguity Benefits directed to an individual as a member of a charitable class do not constitute unjust enrichment “Significant” and “Substantial” as even a small amount of private benefit has put exemption at risk. The burden of proof is upon the organization to establish that it is not organized or operated for the benefit of private interests IRS statute requires transactions between the organization and those who are insiders be tested against a standard of “reasonableness”.

6. Option to Consider Funds raised by the unit from product sales belong to the unit. Funds may be used to: –Reduce the cost of participation, including the cost of attending camp or obtaining uniforms –Provide financial assistance or awards to individual Scouts based upon their level of attendance, advancement, participation generally or in specific activities Unit maintains accounting documentation outlining the consistent application of policy.

7. Addition Guidelines RULE OF THUMB - As long as units use good sense and good judgment and things aren't taken to the extreme, then whatever they do with funds in the name of scouting is going to be accepted and approved by anyone who looks at it. PRODUCT SALES GUIDE - August 2014 release FISCAL POLICIES AND PROCEDURES FOR BSA UNITS – August 2013 FUNDRAISING POLICIES AND PROCEDURES MANUAL - 2011 Printing (is being rewritten as a priority) GUIDES TO UNIT MONEY-EARNING PROJECTS -2011 Printing