Scouts-L Mail Archive for December of 1999: Re: Deductibility of Contributions
Re: Deductibility of Contributions
Bruce E. Cobern
Sat, 18 Dec 1999 00:20:41 -0500
> From: Scouts-L Youth Group List [mailto:Scouts-L@listserv.tcu.edu]On
> Behalf Of GMarmet@AOL.COM
> Sent: Thursday, December 16, 1999 5:22 PM
> First, I would doubt that the IRS will respond, but they may.
Well, actually, the IRS now takes questions by email from their website
and they generally DO respond. In fact, I would believe that the answer
would probably be in the affirmative.
> Second, the technical answer is very clear: contributions to
> a Cub pack are NOT deductible, because they benefit
> individual scouts, not scouting. To benefit Scouting the
> contributions must be made to the Council or National.
Actually, I disagree. First, since the donor would not be specifying
WHICH youth benefited from the contribution, it certainly would not
violate the "inure to the benefit of individuals" prohibition. Second,
if you accept the conventional wisdom (which I think we debunked here a
while ago) that the unit is not a separate entity, but is part of the
sponsor, then the deductibility would depend on whether the sponsor was
a 501(c)(3) organization or not. Third, I believe that the question
about deductibility is covered in Section 170, not in 501, and that it
is possible for "part" of an organization which is not tax exempt to
function in a fashion so that contributions to it would be deductible.
Finally, if you reject the conventional wisdom, which I do, and believe
that the assets of the unit DO NOT belong to sponsor, but belong to the
unit, then the unit itself is an unincorporated association which can
qualify to be tax exempt and eligible to receive donations. Whether it
is worth the effort to establish that is another story. Of course, it
IS possible that the IRS' grant of exemption to the BSA is a group
exemption letter which covers not only national, but also all the
separate councils, and possibly even the units within those councils.
As a practical matter, I really doubt that any revenue agent who sees a
check for a donation to Troop X, BSA will even THINK about any of these
possibilities, but I do believe it is important to know the technical
answer to the question.
Bruce E. Cobern, CPA