Do what thou wilt shall be the whole of the Law.
You may have heard that O.T.O. is a non-profit, tax-exempt corporation (actually there are two corporations, one for O.T.O. International and one for U.S. Grand Lodge, but for the sake of clarity I will treat them as one entity called "O.T.O."). This particular legal standing, recognized by the federal and state governments, imparts to us many benefits; but it also limits us in certain ways. If we want to continue to receive the benefits of our tax-exempt status, we need to abide by the legal requirements and conditions of that status. In this article, I will detail some of those benefits, as well as the rules by which we must abide in order to enjoy them. Since much of the O.T.O. operates and interacts with the rest of the world on a local basis, every member should be aware of these requirements. In particular, local body masters must abide by these rules in order to maintain their body in good standing.
First of all, O.T.O. is a non-profit corporation. We have designated it as such in our Articles of Incorporation and Bylaws. What this essentially means is that no individual shall personally profit from the activities of the corporation. All receipts in excess of expenses must be applied to the non-profit purposes of the corporation, namely, to support the fraternal and religious activities of the O.T.O. This important rule applies at the local level as well. It is important to keep funds collected for O.T.O. separate from your personal funds. Local bodies which handle dues payments and initiation fees are required to establish a separate bank account in the name of the body. (Information on how to do this is available here.) Furthermore, do not borrow against O.T.O. funds or use them as collateral for a personal loan. When a local body closes for any reason, any money remaining must be sent to Grand Lodge.
In addition to our non-profit status, we have been recognized as tax-exempt by the IRS under tax code section 501(c)3. For this purpose, we are classified as a religious organization by the IRS, and we are not required to pay taxes on our income. This important benefit also comes with conditions. One of these is that we cannot engage in any political lobbying. Again, this applies at all levels of the Order. Local body newsletters must not include endorsements for any political party or candidate, nor encourage voting a particular way on a particular ballot measure. You may encourage people to vote, but not how to vote.
One of the greatest advantages of our classification as a religious organization by the IRS is that contributions to the O.T.O., whether made to Grand Lodge or to a local body, are tax-deductible. This applies to anyone who gives money to the Order, members and non-members alike. However, like everything else, there are specific conditions which govern this. The basic rule is that in order for a contribution to be tax-deductible, you must not have received any goods or services in exchange. Thus, money you pay for a feast is not deductible, since you received food in exchange. However, any additional contributions you make (either to the local body or to Grand Lodge directly) are generally deductible. These contributions do not have to be in the form of cash. For example, if you purchase a required piece of temple equipment and donate it to the Oasis, you may deduct the cost of that equipment. In addition, your national and local O.T.O. dues are tax-deductible, but initiation fees are not. If in doubt, consult a qualified tax preparer or accountant.
In some cases, part of the cost of running a local body comes out of the pocket of the master or officers. For example, a master of an Oasis may pay the bill for the Oasis phone line every month. Luckily, such expenses are tax-deductible, but only if paid from your own money and not reimbursed from body funds. Also, the item purchased must be for the sole use and benefit of the body; for example, you cannot deduct the cost of remodeling your house just because it is used by the local body, since you would personally benefit. Also, you cannot deduct the value of your time spent doing things for the Order (I wish!).
In order to take advantage of the tax deduction, all contributions must be documented appropriately. In most cases this is as simple as obtaining a receipt from the local body for your contribution. However, if your contribution is $250 or more, the body must write a letter to you acknowledging your contribution. This letter should be on the local body letterhead, must state the amount of the contribution, and that no goods or services were provided to the donor in exchange for the donation. This letter does not have to be filed with your tax return, but you may need to produce it if requested to do so by the IRS. A sample letter may be viewed here.
Of course, all donations and expenses must be properly recorded in the financial records of the body as well, and reported to the G.T.G. on a regular basis. Please contact the Document Control Officer to obtain forms that you can use for this purpose (or you may report in your own format as long as it conforms to standard accounting methods). If your body conducts a significant business enterprise on the side (e.g., sells goods such as T-shirts, incense, etc.) the income from this activity falls under these provisions as well. Please indicate the income and expenses associated with these activities separately and clearly in your financial reports; certain kinds of activities require additional reporting to the IRS.
If you are a member or body master and have any for-profit business enterprise that you run personally, make sure it is clearly separated from your O.T.O. activity. Do not associate your business with the name of O.T.O. or your local body, so that the separation between the non-profit and profit ventures is very clear. Likewise, do not use the same e-mail address or web pages to conduct activities for your personal business and for O.T.O.
Finally, keep in mind that I am not a tax lawyer, so all of the foregoing information should be regarded only as a general guide and not as specific advice for your situation. I cannot determine whether a particular contribution is tax-deductible for you; this responsibility rests with the individual taxpayer. For more information, I strongly encourage everyone to refer to IRS Publication 526 on Charitable Contributions (available online at http://www.irs.ustreas.gov/formspubs/index.html), or consult a qualified tax professional. Nonetheless, I welcome your feedback or any other questions you might have. You may contact me directly at firstname.lastname@example.org.
Love is the law, love under will.