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COMPLIANCE-MANUAL.Pdf THE AMERICAN LEGION DEPARTMENT OF NEW YORK POST COMPLIANCE MANUAL THIS MANUAL MUST REMAIN ON POST PROPERTY AT ALL TIMES THIS ENTIRE MANUAL REVISED DECEMBER 2009 UPDATE JUNE 2010 (PAGE 18) REPLACES ANY AND ALL PREVIOUS COMPLIANCE MANUALS HISTORY THE AMERICAN LEGION DEPARTMENT OF NEW YORK POST COMPLIANCE MANUAL PUBLISHED BY THE AMERICAN LEGION DEPARTMENT OF NEW YORK RICHARD M. PEDRO ADJUTANT ENTIRE MANUAL REVISED – DECEMBER 2009 UPDATE – JUNE 2010 (PAGE 18) TABLE OF CONTENTS Foreward 1 General 1 Purpose 1 Responsibility 1-2 C&B’s Moneys & Collections 2 C&B’s Regulations 2 War Veterans’ Organizations Tax Exemption Section 3-8 Membership Eligibility 3-4 Purposes 4-5 Purposes Verification 6 Deductible Contributions 6 Record Keeping 6 Appendix 3 7 Appendix 4 8 Suggested House Rules 9-10 Post Compliance Officer “Duty” 11 Incorporation 12 Municipality 13-28 Real Property Tax 13 Municipal Services 13 Veterans Organization 13 Exemption from Special Ad Valorem Levies and Special Assessments 13-14 Chapter 82. Special Utility Rates Veterans’ Post Homes 14 Games of Chance 14 Bingo Operations 14 Sale of Bell Jar Tickets 14 Bingo Equipment 14-15 Bingo Admission Fees 15 Expenditure 15 General Municipal Law 476 15 Bell Jar Operations 16 Post Financial Report to Membership 16-17 Bookkeeping System Required 16 Books & Records Available for Examination 17 Financial Report to Membership 17 NYS Racing & Wagering Requirements for Bell Jar 17-18 Duties of Member in Charge 18 Games of Chance Equipment 19 Vending (Bell Jar) Machines 19 Merchandise & Coin Boards 19 Stamp Machines 19 Expenditure 19-20 Casino Nights 21 TABLE OF CONTENTS (cont’d) Raffles 21-24 General Expenditures 24-25 Post Expenditure 25 Building Fund 25 Interest Bearing Account(s) 25 Delegates 26 Veteran Related Programs Chart 27 Post Lounge 28 New York State 29-32 Tax Filing 29 Employment Requirements NYS Disability Insurance 29 Worker’s Compensation 29 NYS Unemployment Insurance 29 NYS quarterly Tax Withholding Report 29 Employees’ Tips 30 Club (Alcoholic Beverage) License Rules 30-31 Sales Tax NYS Local Sales & Use Tax 31 Sales by Exempt Organization 31 Exemption for USA/NY Flags 32 Exemption for Military Decorations 32 Fund Raising 31 Federal 33-41 Federal Annual Filing Requirement 33 Unrelated Business Income 33 FAQ 33-37 Federal Special Tax Stamp 37 Federal Filing for Employers Requirements 37 Gaming Tax Filing Requirements 37-39 Form IRS 730 Tax on Wagering 39 Form W-2G – Form 945 39 IRS Revenue Ruling 84-140 40 Internal Revenue Code 170(c)(3) 40-41 Useful Contact Information New York State Racing and Wagering 41 Annual Electronic Filing IRS 41 New York State Liquor Authority 42 – 43 FOREWARD GENERAL: The National Organization is listed as a tax exempt organization described in Internal Revenue Code Section 501(c)(19) with a group exemption number (GEN) of 0925. Each Post with an Employers Identification Number (EIN) is included under the organization’s GEN 0925. PURPOSE: This Compliance Manual is intended to assist those responsible for conducting American Legion business according to the special status (501(c)(19)) that the US Government has granted this organization. RESPONSIBILITY: It is the responsibility of the Post to ensure, in addition to the Compliance Manual requirements, that the Post Compliance Manual remains at the Post at all times and is maintained and updated with the revisions and changes issues by the Department. The Post Compliance Manual is to be made available, under the supervision of the Post Commander or Post Compliance Officer, when requested by any member of the Post. The responsibility of the Post Compliance Officer or Committee is to enforce strict adherence to the Federal and State Guidelines at they pertain to all types of income (related and unrelated business), special games (i.e., Bingo, Bell Jar), etc. Richard M. Pedro, Adjutant The American Legion Department of New York This manual is provided to the Posts as a service of The American Legion, Department of New York. The American Legion, Department of New York assumes no responsibility for the conduct of its Posts. The American Legion, Department of New York does not guarantee that any particular Post will comply with the guidelines in this manual and does not guarantee that these guidelines are applicable to any particular situation. Charles G. Mills Department Judge Advocate NOTE: “post” denotes “Board of Directors/Corporation” Page 1 RESPONSIBILITY (cont’d) THE AMERICAN LEGION DEPARTMENT OF NEW YORK CONSTITUTION AND BY-LAWS ARTICLE XIII MONEYS AND COLLECTIONS Section 1. All Department, District, County, and Post officials handling American Legion moneys shall be properly bonded with a good and solvent bonding and surety company, as surety to cover double the average amount of money handled in a single year. In case of delinquencies of the payment of moneys due Department Headquarters action shall be taken at once by the proper officials to bring about a speedy and complete settlement. The bond provided by Department and District officials shall be approved by the Department Executive Committee and those provided by county and Post officials shall be approved respectively by the County and Post Executive Committees. Section 2. The Department Executive Committee shall, should it be deemed advisable, detail special auditors to investigate the membership roll and financial statement of any District, County, Post, or other subdivision within the Department. ARTICLE XIV REGULATIONS Section 1. The Department Executive Committee is authorized to make and publish regulations for the organization, management, and conduct of this Department and of the County, Post, and all other organizations of this Department. Such regulations shall be consistent with the Department’s Constitution and these By-laws and shall be COMPLIED with by all concerned. PLEASE NOTE: The requirement (bond) detailed in Article XIII, Section 1, Section 2; and Article XIV, Section 1 of the Department’s Constitution and By-laws is applicable to all Post Officers and officials who handle American Legion money, i.e., Post Treasurer, Bell Jar Chairman, Bingo Chairman, Bar Manager, Raffles, et al. Page 2 WAR VETERANS’ ORGANIZATIONS TAX EXEMPTION SECTION 501(c)(19) OF THE CODE War veterans’ organizations were formed to uphold and defend the Constitution of the United States, to maintain law and order; to preserve the memories of their comrades who served in the great wars; to foster the spirit of patriotism; and to safeguard, for posterity, the principles of justice, freedom, liberty, and democracy. These organizations operate posts where members associate and enjoy comradeship with other former service men and women exclusively. All of the post members volunteer (meets the “substantially all” requirements of Pub. 3079) their time and effort to raise all of the funds required to build and maintain their post home. The post home is private and open to members only and is considered by members to be a home away from home. Post homes are not available for public use, control, or participation. Prior to the passage of the Act of August 2, 1972, war veterans’ organizations were grouped together with all other veterans’ organizations and most were recognized as exempt under IRC 501(c)(4) as social welfare organizations. The United States Congress enacted “The Act of August 29, 1972 (Public Law 92-418, 86 Stat. 65 reproduced in 1972-2 C.B. 675) designated as IRC 501(c)(19) exclusively to provide qualifying war veterans’ organization and their related auxiliaries not only tax exempt status, but permitted the war veterans’ organizations to conduct both social welfare activities and recreational activities among its members without adversely affecting its tax-exempt status. A war veterans’ organization, as described in IRC 501(c)(19) must satisfy: ¾ The membership eligibility. ¾ Is organized in the United States or any of its possessions. ¾ Its activities further the purposes set forth in Reg. 1.501(c)(19)-1(c) of the regulations. ¾ None of its net earnings inures to the benefit of any private shareholder or individual. Membership Eligibility: “War Veterans” are defined in Rev. Rul. 84-140 as people who have served in the United States Armed Forces1 during a period of War2. 1The United States Armed Forces, as defined in IRC 7701(a)(15): Military and Naval Forces and Armed Forces of the United States. The terms “military or naval forces of the United States” and “armed forces of the United States” include all regular and reserve components of the uniformed services which are subject to the jurisdiction of the Secretary of Defense, Secretary of the Army, Secretary of the Navy, or Secretary of the Air Force. Each term includes the Coast Guard as well. 2The periods of war are specified in 38 USC Sec. 101 and Rev. Rul. 78-239, 1978-1 C.V. 162, as shown below: WW II 12/7/41 – 12/31/46 Merchant Marines 12/7/41 – 12/31/46 Korea 6/25/60 – 1/31/55 Vietnam 2/28/61 – 5/7/75 Lebanon-Grenada 8/24/82 – 7/31/84 Panama 12/20/89 – 1/31/90 Persian Gulf 8/2/90 to cessation of hostilities as determined by the United States Congress Page 3 Membership Eligibility (cont’d) The membership requirements under 501(c)(19) of the Code, Senate Report No. 92-1082, 92nd Congress, 2nd Session, state that “substantially all” means 90% of the post membership meets the war veterans membership eligibility. Membership is restricted to “war time veterans only” and is not open to the general public or to those who served in the Armed Forces, National Guard, or Reserves during peace time duty. War Veterans’ Organizations – Purposes War Veterans’ Organizations traditionally have been involved in programs that promote Americanism, sponsor youth activities, provide color guards, and conduct patriotic ceremonies and community activities.
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