Introduction

Veterans’ organizations occupy a special place in the world of exempt organizations. Not only are most veterans’ organizations exempt from tax, contributions to them may be deductible, and some are permitted to set aside amounts that are used to provide insurance benefits for members. This combination—tax-exempt status, deductibility of contributions and the ability to pay benefits to members—is relatively rare and is evidence of Congress’ intent to provide special tax treatment for veterans’ organizations. When coupled with the ability to engage in both lobbying activities and political activities, it is fair to say that veterans’ organizations are unique in the tax-exempt sector.

Many questions arise in connection with the tax status of veterans’ organizations. This publication provides general information relating to the federal tax rules and Internal Revenue Service (IRS) procedures to help veterans’ organizations understand their responsibilities within the federal tax system.

This publication is a convenient “one-stop” collection of existing provisions of tax law that may relate to, or affect, veterans’ organizations.

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