IRS is requiring DD214’s
This is the link to the complete IRS Examining Process for Veterans Organizations.
The excerpt below gives inspectors the option of reviewing DD214s.
126.96.36.199 (01-27-2011) Field Examination Guidelines
Review the following to determine the composition of membership of the organization:
Articles of incorporation, charter, bylaws, and meeting minutes,
Membership applications, DD Forms 214, or other discharge documents,
Membership cards and master member lists if they designate status as veteran, non-veteran, auxiliary, or other membership class, and
The dues structure for the classes of membership.
The organization must maintain members’ military service dates to establish that contributions to the organization are deductible, if a war veterans’ organization under IRC §170(c)(3).
American Legion Post 447 in Round Rock, Texas, was fined $12,000 for lack of compliance before rounding up the necessary official documents (DD 214’s) to satisfy inspectors.
As we look into where and when the IRS mandate was created we suggest you hedge you bets and come into compliance. If an inspector came to your post and wanted to see your members DD 214’s how long it would take to produce them? It took the legion 12 days at $1,000 dollars a day.
The Committee on Veterans’ Affairs asked Daniel Werfel, Acting IRS Commissioner for clarification in writing “regarding this serious and troubling change in IRS policy” on 29 August 2013. September 3 was the deadline for the IRS to respond with “complete written justification for requiring veterans organizations’ to provide these materials.” The IRS missed the deadline.
With that said ask your members to find their DD 214s. If it blows over, shred the documents if it doesn’t, you will be ready for the knock at your door. If a member cant find his DD 214 he can request one at this site.
If the archives says they had a fire or the dog ate it keep the letter for the IRS. Keep DD 214’s under lock!
IRS Audit Guidelines