IRS revises position on DD-214 requirement

The American Legion recently reported that the Internal Revenue Service was fining Legion posts – up to $1,000 per day – for not keeping records of veterans’ DD-214s, the separation document given by the military to prove honorable service, or other valid documentation. The Legion felt it was being wrongly targeted, resulting in the passing of three resolutions during the organization’s national convention in Houston that called upon Congress to look into the IRS’ field investigations into Legion posts, while 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.

The IRS has now revised its position on the DD-214 requirement in section 501(c)19 of the Internal Revenue Code.

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 before requesting DD-214s or other discharge documents.

Read the revised guidelines here.