The Americanlegion

the world's largest veterans organization

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  • Saturday, December 14, 2013

    Legion Influenced IRS DD-214 Revision

    The Internal Revnue Service (IRS) has been conducting audits of American Legion Posts and fining some of them — up to $1,000 a day — for not having records of DD-214s (the military separation document proving honorable service). The IRS has now revised its position on the DD-214 requirement in section 501(c)19 of the Internal Revenue Code — thanks to American Legion efforts.

    IRS building

    Effective immediately, DD-214s are only required if an agent “possesses information that contradicts documentary information provided (by the veterans service organization) or if the organization fails to satisfy a reasonable request…” If an agent requires proof of membership eligibility, he or she will first request four sets of documents (such as member list with status as veteran or service member, policy for determining eligibility, membership card, or dues structure and classes of membership) before requesting DD-214s or other discharge documents.

    The American Legion felt it was being wrongly targeted, resulting in the passing of three resolutions during the 2013 National Convention in Houston last summer that called upon Congress to look into the IRS’ field investigations into Legion posts. Lawmakers wrote letters to the IRS asking why inspectors were asking posts to provide discharge papers or service records during reviews of their tax-exempt statuses.

    National Legion staff and legal representation met with four IRS officials – the only veterans service organization (VSO) to do so – during which time the Legion asked that the IRS agree to change its internal regulations and guidance to comply with the above three resolutions.

    The American Legion also requested that the IRS create a new position within the agency – an ombudsman serving as a resource for VSOs – and agree to appoint a VSO liaison in each district that will agree to attend Legion department conventions to provide training and personal assistance to any department that needs it. Types of assistance can include Form 990 completion, initial requests for nonprofit status, compliance measures, and any other IRS compliance or relationship matter with which posts or departments may need assistance.