1. Post Finance Officer

2. 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
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3. 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
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4. Bonding The American Legion
National   requirement - bond   for   at   the   amount   of   gross   income   plus expenses
 Bond   the   positions   rather   than   the   individuals
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5. 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
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6. Post Audit The American Legion Annual requirement
Post   Judge   Advocate   and   the   Post   audit   committee   or   an   outside   auditor.
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7. 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
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8. Tax Exemptions The American Legion Income tax on related income
Ad Valorem tax on the Post home – request annually before May 1
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9. 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
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10. 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
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11. 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
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12. 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 Both the EIN and GEN numbers are used on your Form 990, 990EZ and 990-T.
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13. 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:
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14. 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
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15. 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.
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16. 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
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17. 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.
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18. 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.
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19. 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.
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20. 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.
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21. 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
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22. 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?
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23. Sample Certification of Post Books
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24. Questions?
The End
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