The IRS Code Section 501 Chapter 19 - Veteran Organizations
Have you every taken the time to read the IRS Code The American Legion is governed by in regard to Tax Issues? For your reading pleasure see below.
501(c)(19) - Veterans' Organizations
Examples of groups that qualify for exemption are posts or auxiliaries of the American Legion, Veterans of Foreign Wars, and similar organizations.
To qualify for recognition of exemption, your application should show:
That the post or organization is organized in the United States or any of its possessions,
That at least 75% of the members are past or
present members of the U.S. Armed Forces and that at least 97.5% of all
of the organization are past or present members of
the U.S. Armed Forces, cadets (including only students in college or
ROTC programs or at armed services academies) or
spouses, widows, widowers, ancestors, or lineal descendants of any of
listed here, and
That no part of net earnings inure to the benefit of any private shareholder or individual.
In addition to these requirements, a veterans' organization also must be operated exclusively for one or more of the following purposes.
To promote the social welfare of the community (that is, to promote in some way the common good and general welfare of the
people of the community).
To assist disabled and needy war veterans and members of the U.S. Armed Forces and their dependents and the widows and orphans
of deceased veterans.
To provide entertainment, care, and assistance to hospitalized veterans or members of the U.S. Armed Forces.
To carry on programs to perpetuate the memory of
deceased veterans and members of the Armed Forces and to comfort their
To conduct programs for religious, charitable, scientific, literary, or educational purposes.
To sponsor or participate in activities of a patriotic nature.
To provide insurance benefits for its members or dependents of its members or both.
To provide social and recreational activities for its members.
Auxiliary unit. An auxiliary unit or society of a veterans' organization can apply for recognition of exemption provided that the veterans' organization (parent organization) meets the requirements explained earlier in this section. The auxiliary unit or society must also meet all the following additional requirements.
It is affiliated with, and organized in accordance with, the bylaws and regulations formulated by the parent organization.
At least 75% of its members are either past or
present members of the U.S. Armed Forces, spouses of those members, or
to those members within two degrees of kinship
(grandparent, brother, sister, and grandchild represent the most distant
All of its members either are members of the parent organization, spouses of a member of the parent organization, or related
to a member of such organization within two degrees of kinship.
No part of its net earnings inure to the benefit of any private shareholder or individual.
Trusts or foundations. Trusts or foundations for a veterans' organization also can apply for recognition of exemption provided that the parent organization meets the requirements explained earlier. The trust or foundation must also meet all the following qualifications.
The trust or foundation is in existence under local law and, if it is organized for charitable purposes, has a dissolution
provision similar to charitable organizations. (See
Articles of Organization
in chapter 3 of this publication.)
The corpus or income cannot be diverted or used other than for:
The funding of a veterans' organization, described in this section,
Religious, charitable, scientific, literary, or educational purposes or for the prevention of cruelty to children or animals,
An insurance set aside.
- The funding of a veterans' organization, described in this section,
The trust income is not unreasonably accumulated
and, if the trust or foundation is not an insurance set aside, a
portion of the income is in fact distributed to
the parent organization or for the purposes described in item 2(b).
It is organized exclusively for one or more of the purposes listed earlier in this section that are specifically applicable
to the parent organization.
Tax treatment of donations. Donations to war veterans' organizations are deductible as charitable contributions on the donor's federal income tax return. At least 90% of the organization's membership must consist of war veterans. The term war veterans means persons, whether or not present members of the U.S. Armed Forces, who have served in the U.S. Armed Forces during a period of war (including the Korean and Vietnam conflicts, the Persian Gulf war, and later declared wars).
The American Legion Department of Michigan represents over 86,000 members in the State of Michigan. The American Legion was founded in 1919, based on “The Four Pillars”; veteran rehabilitation, Americanism, child welfare, and national security and continued above all its mission as a consumers’ advocate for veterans. For more information contact the Michigan Legion at 517-371-4720 ext 16, firstname.lastname@example.org, or visit our website at www.michiganlegion.org.