Post Finance Officer

Post Finance Officer Duties Makes all Deposits Pays all the Bills – When properly authorized Keeps the books Makes Financial reports – Monthly and Quarterly Recommends financial Policy Usually serves as chairman of the Budget Committee The American Legion

Membership Dues The American Legion $13.50   Department   dues   plus   $18.50   for   National   dues   for    $32   total Forward   promptly,   do   not   spend   for   bills Posts   set   their   own   dues,   however   $32   must   be   transmitted   to   Department The American Legion

Bonding The American Legion National   requirement - bond   for   at   the   amount   of   gross   income   plus expenses  Bond   the   positions   rather   than   the   individuals The American Legion

Post Budget The American Legion Reasons for budget - includes   all   programs   and   prevents   emotional handling Method   of   operating - any   method   the   Post   has   for   authorizing   the   payment of   bills   that   is   agreeable   to   the   membership The American Legion

Post Audit The American Legion Annual requirement Post   Judge   Advocate   and   the   Post   audit   committee   or   an   outside   auditor. The American Legion

Federal Requirements The American Legion Employer identification number – Every Post must have one to use on bank accounts and tax returns W2 annually to each employee and 1099 forms to each contract laborer by January 31st 990 tax return and 990-T for unrelated income   The American Legion

Tax Exemptions The American Legion Income tax on related income Ad Valorem tax on the Post home – request annually before May 1 The American Legion

Taxable Items – Not Exempt Sales   tax   on   sales   made   by   the   Post Tax   on   alcoholic   beverage   purchases Bingo   gross   receipts   tax Cigarette   tax Tax   on   pool   tables Gambling   tax Matching   social   security   tax   on   employees   wages Matching   Medicare   tax   on   employee   wages Withholdings   of   income   tax,   social   security   tax   and   Medicare   tax   for employees State   and   Federal   unemployment   taxes Minimum   wages   for   employees Excise   taxes Royalty   (ASCAP)   tax   -   when   the   performance   is   open   to   public The American Legion

Keep Records on all Post Financial Accounts Lack of knowledge of the tax laws will not excuse the taxes or penalties and interest due Seek professional help if you need it The American Legion

Charitable Donations The American Legion The Department of Oregon Foundation Department of Oregon Oratorical Scholarship Eagle Scout of the Year Scholarship American Legion Baseball Scholarship Children and Youth Fund National Disaster Relief Fund Temporary Relief Fund The American Legion

Unrelated Business Income The American Legion is exempt from payment of Federal Income tax under the provisions of Section 501© (19) of the Internal Revenue Code of 1954, as amended. Each Post must apply with the IRS for an Employer Identification Number (EIN), this number is different for every Post. The American Group Exemption number (GEN) is 0925. Both the EIN and GEN numbers are used on your Form 990, 990EZ and 990-T. The American Legion

Unrelated Business Income However, the provisions of the 1969 Tax Reform Act have reinforced a liability for taxes to be paid on “unrelated business income” earned by the Posts of The American Legion. The effect of these provisions on the normal fund-raising activities of the Legion Posts may be summarized, generally as follows: Unrelated business income is defined in the Code as the “gross income derived by any organization from any unrelated trade or business regularly carried on by it, less the deductions which are directly connected with the carrying on of such trade or business.” Therefore: The American Legion

Unrelated Business Income It is income from a trade or business Such trade or business is regularly carried on by the Post The conduct of such trade or business is not substantially related (other than through the production of funds) to the organization’s performance of its primary function to promote the purposes of the American Legion The American Legion

Unrelated Business Income Unrelated Business Income Normally Does Not Include Income from dividends, interest annuities or royalties Income from rental of real property under a lease of less than five years: e.g. land, buildings, offices, the Post Hall etc. Income from rental of personal property if incidental to the amount of the total rents under a lease. Income from a trade or business in which substantially all of the work done is without pay, volunteer help. The American Legion

Unrelated Business Income Unrelated Business Income Normally Does Not Include (cont.) Income from a trade or business, which sells merchandise, substantially all of which is donated. Income from a trade or business which is not “regularly carried on.” Gains or losses on sale or exchange of property. Bingo income provided the games are conducted in accordance with local law The American Legion

Unrelated Business Income The income realized in the normal fund-raising activity of a Legion Post ( a Bar-BQ, sale of candy, raffle tickets, turkey shoots, etc.) is not unrelated business income. However, if a Post carries on an income producing activity, other than rental of real property, which operates on a regular basis through the year in a manner similar to a comparable trade or business of a commercial enterprise (such as a parking lot one day each week, monthly dances open to the public, a restaurant or bar lounge open to the public or even to members and guests on a regular basis through the year), then the Post will have “unrelated business income,” with respect to such activity and my be liable for the tax imposed thereon. The American Legion

Unrelated Business Income The profits of an exempt organization from advertising and other activities carried on for the production of income through sale of goods or services, e.g., sale of advertising in a periodical, journal, magazine, newspaper or newsletter it publishes, are taxable unrelated business income. Such income is subject to special computations in the allocation of space and costs. Special consideration also is given to leasing a mortgaged building in that the income may be taxable. If income is partially taxable, a proportionate part of the deductions will be allowed as an offset against the income. The American Legion

Unrelated Business Income In summary, the IRS says that each Legion Post must continue to file Form 990 or 990-T each year on or before the 15th day of the fifth month following the close of the accounting period. Employee VS. Contract Laborer The Internal Revenue Service defines an employee as follows: If you provide material to do the job, and If you tell the individual when to work, and If you tell the individual how to do the work, then He/She is an employee and not a contract laborer. The American Legion

Unrelated Business Income If any one of the three provisions above is not true then the individual could be considered a contract laborer. It is advisable to have the individual sign a written statement that they are aware that they are working as a contract laborer and are being paid accordingly. The above information is designed to alert you to the tax situations that may affect your Post and yourself. If any doubt exists as to your particular situation, it is in your best interest to resolve it by seeking more detailed information through the Internal Revenue Service. The American Legion

Finance Questions The American Legion Post Financial Records are available, to include checkbook? Does the Post have an Employer Identification Number? Does the Post have copies of submitted IRS Form 990? Is the current copy of the IRS Form 990 on file? Has the Post conducted it’s own audit? If yes, is a copy on file? When was it conducted? Has the checkbook been reconciled and balanced? If so when? Who is authorized to sign Post checks, or have access to the Post Funds? Refer to Post By-laws The American Legion

Finance Questions The American Legion Does the Post have a surety bond for the appropriate officers on file? Do submitted Membership cross-reference to a payment by the Post Check Book? Do Minutes reflect Post authorization of expenditures from the Post funds? Does the Post have a relief from property tax from the local taxing entities? Does the Post have any written contracts with other organizations? Does the Post have a Budget for the year? The American Legion

Sample Certification of Post Books The American Legion

Questions? The End The American Legion