marine corps league€¦ · 23-24 february 2018 marine corps league irs 3 national marine corps...

Marine Corps League

IRS Issues

National, Division, Department, Detachment

MODD and MCLA

REV D 20 March 2018

Purpose

• Corporate Structure

• Supplemental Group Ruling Information– IRS requirements

– New IRS 8976 online registration

• EOBMF explanation

• State Registration

• Recommendations

• Help Needed

• Questions

23-24 February 2018 Marine Corps League IRS 2

Corporate Structure


National Marine Corps League

501c4

The Alumni Organization of the USMC

➢ Reviewing current League structure➢ Tighter controls on subsidiaries

➢ Responsible for their 990’s➢ Complete ROI’s ➢ Reporting irregularities

➢ National 990’s submitted on time➢ Restructure of budget➢ Restructure of QuickBooks➢ Quarterly audit and reports➢ Establish SOP’s for operation

➢ Foundation works for the League➢ Expand how we use the Foundation

➢ Maintain current structure➢ Humanitarian Assistance➢ Scholarships➢ Restricted Funds

➢ Acquire Corporate donations➢ Disaster relief (assistance) for

members and families

Marine Corps League Foundation

501c3

Operational Stability & Community Image

Restructuring of the MCL

• The Marine Corps League is a legal Non-Profit Organization

• All subsidiaries are wholly owned business entities under the Parent Organization

• National Commandant is also CEO

• Senior Vice Commandant is also Corporate Secretary

• Junior Vice Commandant is also the Corporate Treasurer


National Roster

• New Roster Format

– League Elected Staff

– Appointed Staff

– Outsourced task• Bookkeeping

• Legal needs

– Combined task

– Separated• Subsidiaries

• Independent

• Established:

• Non-Profit Corporate structure

– Chief Executive Officer

– Chief Operating Officer

– Corporate Secretary

– Corporate Treasurer


Marine Corps LeagueOperating as a 501 (c) 4

Supplemental Group Ruling Information

(SGRI)

Parent List Gen0955

Research by:Allen FergusonWendell Webb

References:IRS Documents & Web siteLeague MembersCPA FirmsIRS Help Lines

Actual process

Entities’ Responsible unit• MCL Entities initiates EIN process • Inform National (Letter/ROI)• Files 990

– Must file within three years of EIN issue

– Successful - accepted– Failure not on parent list?

• MCL Entities exceeds timeline for 990 submission receive letter of revocation

• Many entities not on Parent list

National Headquarters• Receive Letter/ROI• Enter EIN in Database

– Detachments MCL Summary– Departments Unknown– Devil Dogs – Own Database– Auxiliary – Own Database

• Create IRS Parent List– Submit Parent List

• Quarterly• IRS Delays• Never entered• Follow-up with IRS

– Enter Parent Field in Database Roster (currently no feedback to Entities')• Enter Yes or EIN number• No

23-24 February 2018 7Marine Corps League IRS

IRS Process

Departments

National

Detachments

Devil Dogs

Auxiliary

IRS

1. Entities applied for EIN under 501 (C) 42. Complete ROI for National submission3. File 990 or 990ez with IRS4. Complete or Failure5. Document Acceptance with National Hqtr

Parent List to IRS (Manual List)HQ update every FY quarter?

IRS compares Entity and Parent listFor 990 decision to allow 990 submission

1. ROI has EIN and State registration2. National enters manually in Database3. Creates Parent List for IRS?4. Fields in Database does not reflect Parent List?


* Some Divisions have EIN, not in database

Supplemental Group Ruling Information List

23-24 February 2018Marine Corps League IRS

9

National Headquarters EINBoard of Trustees

Detachment’sEIN

Department’sEIN

Devil Dog’sEIN

Auxiliary’sEIN

1. Received letter from IRS dated 18 June 20142. SGRI letter for Parent List submitted March 20143. Change of address received 17 January 2017

Parent List1. IRS Document2. MCL updates yearly

1. EIN2. 0955 Group3. ICO ???? (ROI vs IRS)

3. Does not address1. Deductibility2. In Care of Name (ICO)3. Remaining EOBMF Info

DivisionsEIN


Entity responsible for the following:1. Copy of IRS Letter2. Current ROI

1. Paymaster vs ICO2. IRS selects ICO based on who

files 9903. National provides IRS Letter

1. Add to Group 09552. Verify on EOBMF File

4. Newer entitles’ could file 990 Ez postcard after EOBMF posting

5. Does not solve anyone's problem who has a letter of revocation

6. Once reinstatement occurs the entities' must be put back on Parent List or they can not file 990

National Process

• Yearly Verification of the IRS Parent List for the Federal IRS (Manual Process – Jan – Mar of CY)

• Write letters to Federal IRS adding all new and reinstated entities to the Parent List

• Enter Data from ROI into the database

• Address questions on Exempt Organizations Business Master File Extract (EO BMF) issues


Detachment/Department

• EIN

– New EIN number

• Must register with IRS as a 501c4

• New legislation enacted at the end of 2015 added Section 506 to the Internal Revenue Code.

• Section 506 requires an organization to notify the IRS of its intent to operate as a Section 501(c)(4) organization.

• The IRS has developed a new form – Form 8976 – that organizations should use this process to provide this notification.


Form 8976

• Submitted the IRS Online form 8976 for 501(C)(4) designation • Will say it was a completely easy form to do online (maybe 5 minutes) and

the obvious documents are needed:– valid IRS log-on and password– Name of organization as submitted on EIN application– EIN number– Date of original registration with IRS (date on EIN number assignment letter)– State in which registered– Month in which fiscal ends– confirm that it is for a 501(C)(4) for assignment– confirm the purpose of the organization (via 501(C)(4) parameters)– valid organizational email address– valid organization email address– credit card payment information– DUN!


After logging in you will come to this screen. You will need to identify which application you wish to complete.

Select 501©(4) option from drop down menu

8976 Process


Select form 8976 from the menu

Click on Select button next to form 8976 option, this will open to a new screen.

8976 Process


This screen will reconfirm information needed to proceed. At the bottom of this screen, select the NEXT button

Complete the fields, be sure to data enter as the name shows on your EIN confirmation letter.

8976 Process


Enter data fields as shown.

Enter data; partial is based on the EIN confirmation letter, partial is based on organizational structure.

8976 Process


Be sure select the drop down option of Social Welfare/Civic League

You will see a page to confirm data. Adjust accordingly. If all is good to go, select submit.

8976 Process


Reaffirm your statement of accuracy and click submit.

8976 Process


Next page will open with a roster of forms to submit and amount due. In the second paragraph is the link to pay via credit card/ach

option. Open this new link to a new tab/new screen.

Click on red button to continue to the form.

8976 Process


Enter fields as appropriate. Be sure to populate the Online Application Number from the 89746 form, itself.

Select Continue.

8976 Process


Confirm method of payment for the form submission, click next.

Enter applicable payment options for Credit Card.

OR

8976 Process


Complete fields for proper ACH process.

Confirm information, authorize payment and click submit. Print receipt and file., set up a pay.gov account if needed. Close win-

dow.

8976 Process


Go back to form screen and refer to the main menu. In the view application status, click on the Details button.

Click on Submit Document option

8976 Process



8976 Summary

Detachment/Department

• EIN number has a letter of revocation

– File a 1024 form to get reinstated

– Use MCL Template...

– When EIN is reinstated must submit to HQ for action a copy of the letter

– HQ must submitted letter to IRS for adding to Parent list

– Verification on EOBMF IRS tool on line


Entity Duties

• New Detachment, Department, Division– Establish your IRS accounts and State Registrations

– Provide letters of acceptance and ROI’s to National

– National sends Letter to IRS asking for inclusion on 0955

– Verify on the EOBMF File your acceptance by IRS• EIN, 501c4 status and Deducibility status

• Contact National if data is not correct or non-existent

– File your 990 for per your organization status• Fiscal Year or Calendar Year

• Verify on the Exempt Organizations Select Check

• https://apps.irs.gov/app/eos/ePostSearch.do

• Select “Have filed Form 990-N (e-Postcard)” & Verify w/EIN


https://apps.irs.gov/app/eos/ePostSearch.do

Entities’ impacts

• We have four variable's:– National Headquarters– Entities’ (Detachments, Departments, Divisions)

– Subsidiaries (Devil Dogs, Auxiliary); (additional societies, PNC, MOY)

– Internal Revenue Service (IRS)

• Anyone one of these can cause a very negative result to the process

• A failure at anyone of these entities puts the burden of correction on the subordinate Entities’

• IRS 1024 process of reinstatement– Burden on the Entities’– Costly but can be done


End Result

• Federal IRS (National = Division, Department, Detachment, MODD, MCLA)

– Every MCL entity must be a 501c4 under the Parent List 0955

– Every MCL entity must have a Deducibility code of “1”

• Verification:– Exempt Organizations Business Master File Extract

(EO BMF)– https://www.irs.gov/charities-non-profits/exempt-

organizations-business-master-file-extract-eo-bmf


https://www.irs.gov/charities-non-profits/exempt-organizations-business-master-file-extract-eo-bmf

Anyone can verify status.

• EIN Primary entity responsibility ROI• NAME Marine Corps League • ICO Paymaster or who files 990ez ROI• STREET Entity address or Paymaster ROI• CITY Entity address or Paymaster ROI• STATE Entity address or Paymaster ROI• ZIP Entity address or Paymaster ROI• GROUP 0955 (IRS Letter)• SUBSECTION 501c? 501c4• AFFILIATION Subordinate (9) Group ruling 9• CLASSIFICATION IRS subsection codes “3000?” • RULING YYYYMM of IRS ruling 194607


Definition con’t

• DEDUCTIBILITY Code 1 Contributions are deductible• FOUNDATION Blank for MCL but 501c3 (MCL Foundation)• ACTIVITY ? Foundation• ORGANIZATION Type of organization “5”• STATUS EO Status Code (1=Unconditional Exemption) • TAX_PERIOD Tax period of latest return filed (YYYYMM)• ASSET_CD From 990 files• INCOME_CD From 990 files• FILING_REQ_CD Primary return to file 01-990ez, 02-990N• PF_FILING_REQ_CD 0 – No 990-PF return• ACCT_PD Accounting period or fiscal year ending date • ASSET_AMT From 990 files• INCOME_AMT From 990 files• REVENUE_AMT From 990 files• NTEE_CD National Taxonomy of Exempt Entities Code “0”• SORT_NAME Entity Name uses for business “Chesty Puller Det.


Where we are...

• Working on 2018 Parent List submission– Parent List does not have capability to change

deductibility code

– Requires separate letter to IRS

• Creating a new letter to IRS and electronic faxing to IRS for addition to Parent List

• Trying to help entities where we can but anyone who is revoked has to fix their problem.

• Couple of isolated cases; National works with entity to get unique scenarios.


State Registration

• Everyone under the 0955 must be in good standing in the state in which they operate

• National request your business number and state as part of the ROI

• You must be in good standing at both the state and federal levels

• Good Standing equals verification at State and Federal IRS status before a letter will be submitted.


Commonwealth of Virginia

• National filed for its incorporation papers in the Commonwealth of Virginia

• Effective 12 February 2018 the National Marine Corps League is now fully certified with State Corporation Commission to transact business

• Official copies on file with law firm and Headquarters Marine Corps League.


MARINE CORPS LEAGUE


SCC ID: F2083212Entity Type: Foreign CorporationJurisdiction of Formation: USDate of Formation/Registration: 2/12/2018Status: Active

Registered Agent/Registered OfficeFLUET & ASSOCIATES, PLLC1751 PINNACLE DRIVE STE 1000MCLEAN VA 22102FAIRFAX COUNTY 129

Status: ActiveEffective Date: 2/12/2018

Completions

• Legal services in VA– Time and Material agreement

– Fluet & Associates, PLLC

– National Marine Corps League• Does not require to be registered in DC

• Now registered in the Commonwealth of Virginia– Signed Application 19 January 2018

– We are now legal to do business in VA

• Establish Registered Agent Renewal


Recommendations

• Address the current process and document it in a Best Practice for all entities to follow.– Identify and address how Detachments, Depts.

Divisions, Devil Dogs, Auxiliary track and report facts for Parent List.

• Making recommendations to Board of Trustees– Establish standing committee to monitor, track and

make changes as IRS rules change and problems arise.– Adopt new Best Practice and Implementation

including training with a check & verification process– Track Best Practice for one year and make assessment

and corrections.


Help Needed

• Areas to be reviewed:

– Budget for Legal Time and Material

– Establish a National SOP for our Federal IRS organization.

– Advice for MCL 0955 and MCL National Foundation interactions

• Fund raising

• Distribution of funds

• Service Fees


Questions?


Semper Fidelis

Wendell W. WebbNational [email protected]

314.705.0595

mailto:[email protected]