Opening a Unit Checking Account
Every unit will eventually need to have a checking account. Sometimes this gets confusing for the newly organized unit because the bank demands a federal tax number to open the account. You would not want to 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. 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)). If you are opting for this approach it is important for this SS-4 Form to be carefully completed according to instructions.
Several options are available for fast processing at the end of this document.
Please review the IRS instructions completely and follow the specific BSA instructions as follows:
Name of chartered organization (legal name of applicant) and unit designation; e.g.: First United Methodist Church Pack/Troop 151.
Normally not applicable
“Care of" name (Unit treasurer, committee chairman, or chartered organization representative).
Lines 4, 4a
Mailing address, city, state, ZIP code.
Lines 5, 5a
Address, if different from Line 4.
County and state.
Lines 7a, 7b
Name of principal officer, grantor, or general partner (use chartered organization representative or committee chairperson, and their tax ID number. Please Note: If you do not have the chartered partner’s tax ID number, leave it blank).
. Before you fill in Block 8a, Type of Entity
, remember that the national office issues charters directly to local chartered organizations and not to units. Units should ask their chartered organization for permission to use their EIN if at all possible.
Block 8a Type of Entity
Most units will check one of three boxes:
a. “Church or church controlled organization”, if chartered organization fits this description.
b. “Other nonprofit organization (specify)”, if unit is chartered to a nonprofit organization other than a church.
c. “Other (specify)”, if chartered organization is not a church or other nonprofit organization – just put Boy Scout troop, Cub Scout pack, etc.
If your unit's chartered organization has a GEN (Group Exemption Number) that the unit is permitted to use, put that number in this section. Note, however, that the Group Exemption Number used by BSA local councils may not be used by a unit.
Check appropriate reason (one only) for applying. Most units will check banking purpose (specify) interest account, etc.
Enter closing month of unit accounting year (most units will use charter expiration month).
Lines 12 & 13
Check “Other” and put “Youth program character development” or similar statement.
Check appropriate box.
Lines 16b and c
As needed or leave blank.
Third Party Designee
Give name and unit position of the contact person, such as the chartered organization representative or committee chairman.
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:
Internal Revenue Service
Attention: EIN Operations Philadelphia, PA 19255
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.
We have the EIN but the Bank wants more! What do we do?
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 probably has not 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 all that should be needed is the EIN. If your explaination 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 Sam Houston Area Council does not dictate bank policy, but we can help explain your situation should there be any confusion at the bank. Please ask bankers to call 713-756-3318 for support.
Incidentally, some banks like Compass Bank offer free checking. If you know of others please advise and we will add them to the list.
If you have additional questions please email us: firstname.lastname@example.org