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New Officers, Same Problem: Getting Ahead of Hall Taxes

Lodge Financial Health Check-up

Your January checklist

For your Trestleboard

Find it on freemason.org

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New Officers, Same Problem: Getting Ahead of Hall Taxes

It’s a new year and for many California lodges, a new line of officers are in place. But old problems don’t simply go away with a new master sitting in the east—especially if they involve Uncle Sam. For Maya Lodge No. 793 in San Gabriel, in fact, tax problems nearly spelled the end of their lodge—and underscore why it’s so important that lodges stay on top of their financial liabilities, something all officers can get a jump on by attending the all-new Hall Association Boot Camp at the 2020 Secretary and Treasurer Retreats Jan. 31 in Irvine and Feb. 7 in San Ramon. In the space of just a few months in 2018, Maya No. 793 went from being in good standing and flush with cash to having its charter suspended and facing a tax bill topping $1 million.

Below, Gabriel Lopez, lodge secretary and newly installed president of the Maya Masonic Temple Association, shares the harrowing tale of how his lodge nearly lost it all—and how they stared down their problems and managed to win it all back.

Facing the Music

“We were operating blindly for years,” Lopez says, looking back at how Maya No. 793 found itself in such dire circumstances. “The uncomfortable truth is, everything that happened to us was due to our own negligence.” As these things tend to do, that started with a relatively simple problem: The lodge’s hall association forgot to file its taxes. No one remembers when that first default occurred, but by 2018 the IRS hadn’t heard from the Maya Masonic Temple Association for several years—possibly as many as seven. During that time, their tax-exempt status was revoked, meaning that all income generated from the hall would be taxable. Under normal circumstances, that might not have been a death knell, as the hall didn’t generate much income of its own. However in 2018, the lodge decided to sell its building, unaware of the crippling tax burden it would place on them.

As the paperwork from the real estate sale was being sorted, Lopez and members of Grand Lodge staff uncovered the startling reality. “We potentially owed the government around $1 million in taxes,” he says. The lodge’s secretary for fewer than two years at that point, Lopez nevertheless stepped up to lead the effort to right the ship. He worked closely with Grand Lodge real estate and financial services staff to untangle the mess. “I can’t begin to tell you how helpful Grand Lodge was,” Lopez says.

Together, the hall association and Grand Lodge were able to back-file the missing tax bills and, within a year, recover their tax-exempt status—cancelling the seven-figure debt. The lodge, which had seen its charter suspended during the interim, was also brought back into good standing. “It’s unfortunate we had to discover all of this the way we did,” Lopez says. “My advice to other lodges is to be proactive with their finances.” With an increasing array of tax-preparation and other financial services, Grand Lodge is well-positioned to help lodges stay out ahead of their tax issues. No one enjoys paying taxes, as Maya No. 793 found out the hard way, but avoiding them can end up costing a whole lot more.

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Lodge Financial Health Check-up

Lodge halls are important and valuable assets, and each hall’s situation is unique. Grand Lodge real estate services can help with the following:

  • Provide technical expertise and counsel to hall association trustees for the lease, purchase, sale, and improvement of their buildings; and suggestions for negotiating transactions and structuring agreements.
  • Offer advice on strategic approaches to leverage the value of hall properties.
  • Offer support for completing Grand Lodge Masonic Properties Committee applications.
  • Advise on capital improvement and building operations issues, such as reserve funding, solar projects, and so forth.
  • Run cost-benefit analyses of real estate projects relative to the lodge and hall association objectives.
  • Provide replacement-cost estimates to gauge sufficient coverage against property loss.

To get started, contact Grand Lodge Real Estate Services at (415) 292-9111 or realestate@freemason.org.

New hall association templates are also available online: Lodge Use Agreement and Hall Use Agreement

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Your January Checklist

Stay on track of lodge business and prepare for important deadlines. Here’s your January checklist.


Executive Committee


Master, along with Executive Committee

  • Submit 2020 budget for approval at stated meeting.
  • Present 2020 calendar and program plan at stated meeting.
  • Confirm Audit, Charity, and Membership Retention Committee appointments and review responsibilities with each.
  • Confirm other committee appointments and review responsibilities with each.
  • Review all candidates’ progress towards advancement.

Senior Warden

  • Confirm candidate coaches and review responsibilities.
  • Review all candidates’ progress towards advancement.
  • Begin preparing 2021 program plan.
  • Begin preparing 2021 budget.
  • Begin preparing 2021 officer appointments.
  • Begin preparing 2021 installation of officers.

Junior Warden

  • Confirm with treasurer the policies and procedures of Refreshment Fund, if applicable.

Secretary

  • Continue to collect delinquent dues from members (were due on January 1).
  • Continue preparing secretary’s annual report to present to the lodge in February.
  • Review the list of suspended members sent to you by Grand Lodge and determine if your lodge wants to participate in the Restoration Campaign.

Treasurer

  • Continue preparing treasurer’s annual report to present to the lodge in February.
  • If your lodge has employees, file federal and state payroll taxes.
    • IRS form 941, due in January (unless IRS has approved an annual filing of Form 944, due January 31)
    • State form DE9/DE9C and DE88 (deposit form), due in January, must be filed electronically
    • IRS form 940 (federal unemployment), due in January
    • W-2, due to employees in January
    • W-3 and copy of W2, due to IRS on or before January 31
    • Using Intacct or the Grand Lodge payroll system? Financial Services will complete your payroll forms 940, 944, W-2, and W-3.
  • If your lodge or hall employs independent contractors:
    • Distribute 1099-MISC to contractors by January 31.
    • File Form 1096 with Forms 1099-MISC and send these returns to the IRS on or before January 31.
    • Using Intacct? Contact Financial Services at financialservices@freemason.org or (415) 292-9170 for assistance in generating the 1096 and 1099 reports from Intacct

Questions? Contact Member Services at memberservices@freemason.org or (415) 776-7000.

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For Your Trestleboard

Registration for the UCLA International Conference on Freemasonry is now open! Make sure your members don’t miss it. Also, check out Masonic Gold, the beautiful new coffee table book on the history and development of 20 Gold Country lodges is available for purchase. These make great installation or holiday gifts. Download this ad for the UCLA conference and the Gold Country book.

This month:
UCLA International Conference on Freemasonry
Masonic Gold: Masonry in California’s Mother Lode

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Find it on Freemason.org

In advance of the California Masons’ upcoming Public Schools Month centennial in April, John E. Trauner was elected as grand master of Masons in California Oct. 20, 2019. Together with the rest of the grand family, Trauner announced his administration’s proclamations for the 2020 fraternal year. You can learn more about each of these proclamations on freemason.org

February 2020 is Masonic Widows Month
March 2020 is Youth Orders Month
April 2020 is Public Schools Month
June 2020 is Masonic Homes Month
September 2020 is Constitutional Observance Month
October 2020 is First Responders Month

California lodges are encouraged to recognize each proclamation with appropriate events, fundraising, and other forms of recognition. For more information, contact Member Services at memberservices@freemason.org or (415) 776-7000.

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Question of the Month

Last month we asked which foundation programs your lodge felt most connected to. Of those that responded:

  • 61% - Masonic Youth Orders
  • 48% -Raising A Reader
  • 43% - Masons4Mitts
  • 43% - Masonic Homes
  • 9% - Other


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