Exemption is based on activity not membership.
IRC 170(c)(3) provides an income tax deduction for contributions to a post of war veterans if it is organized in the United States or any of its possessions, and no part of its net earnings inures to the benefit of any private shareholder or individual.
A
membership requirement and a purpose requirement.
be eligible to receive tax deductible contributions under
IRC 170(c)(3), at least 90% of the members must be war veterans.
A war veterans’ organization must also be organized and operated primarily for the following purposes:
A. Furthering comradeship among persons who are or have been members of the Armed Forces,
B. Honoring the memory of deceased veterans and members of the Armed Forces and aiding and comforting their survivors,
C. Encouraging patriotism, and
D. Aiding hospitalized, disabled and needy war veterans and their dependents.
C. IRC 501(
What type of records must be maintained to show the composition of membership?
There is no membership requirement for exemption under
IRC 501(c)(4). A post need only maintain a list of members and the category of membership (veteran, degree of relation, or non- veteran or non-relative) for its own use and to verify dues income.
If a post qualifies under IRC 170(c)(3) to receive tax deductible contributions, it must maintain a list of members, their dates of service, whether they are war veterans, have served in Vietnam, and if not, whether they are spouses, widows, or widowers of war veterans, veterans, or cadets.