1.501(c)(19)-1. War veterans organizations
(a) In general
(1) For taxable years beginning after December
31, 1969, a veterans post or organization which is organized
in the United States or any of its possessions may exempt as
an organization described in section 501(c)(19) if the requirements
of paragraphs (b) and (c) of this section are met and if no
part of its net earnings inures to the benefit of any private
shareholder or individual. Paragraph (b) of this section contains
the membership requirements such a post or organization must
meet in order to qualify under section 501(c)(19). Paragraph
(c) of this section outlines the purposes, at least one of which
such a post or organization must have in order to so qualify.
(2) In addition, an auxiliary unit or society
described in paragraph (d) of this section of such a veterans
post or organization and a trust or foundation described in
paragraph (e) of this section for such post or organization
may be exempt as an organization described in section 501(c)(19).
(b) Membership requirements
(1) In order to be described in section 501(c)(19)
under paragraph (a)(1) of this section, an organization must
meet the membership requirements of section 501(c)(19)(B) and
this paragraph. There are two requirements that must be met
under this paragraph. The first requirement is that at least
75 percent of the members of the organization must be war veterans.
For purposes of this section the term "war veterans"
means persons, whether or not present members of the United
States Armed Forces, who have served in the Armed Forces of
the United States during a period of war (including the Korean
and Vietnam conflicts).
(2) The second requirement of this paragraph
is that at least 97.5 percent of all members of the organization
must be described in one or more of the following categories:
(i) War veterans,
(ii) Present or former members of the United
States Armed Forces,
(iii) Cadets (including only students in college
or university ROTC programs or at Armed Services academies),
or
(iv) Spouses, widows, or widowers of individuals
referred to in paragraph (b)(2)(i), (ii) or (iii) of this section.
(c) Exempt purposes. --In addition to the requirements
of paragraphs (a)(1) and (b) of this section, in order to be
described in section 501(c)(19) under paragraph (a)(1) of this
section an organization must be operated exclusively for one
or more of the following purposes:
(1) To promote the social welfare of the community
as defined in §1.501(c)(4)-1(a)(2),
(2) To assist disabled and needy war veterans
and members of the United States Armed Forces and their dependents,
and the widows and orphans of deceased veterans,
(3) to provide entertainment, care, and assistance
to hospitalized veterans or members of the Armed Forces of the
United States,
(4) To carry on programs to perpetuate the memory
of deceased veterans and members of the Armed Forces and to
comfort their survivors,
(5) To conduct programs for religious, charitable,
scientific, literary, or educational purposes,
(6) To sponsor or participate in activities
of a patriotic nature,
(7) To provide insurance benefits for their
members or dependents of their members or both, or
(8) To provide social and recreational activities
for their members.
(d) Auxiliary units or societies for war veterans
organizations. --A unit or society may be exempt as an organization
described in section 501(c)(19) and paragraph (a)(2) of this
section if it is an auxiliary unit or society of a post or organization
of war veterans described in paragraph (a)(1) of this section.
A unit or society is an auxiliary unit or society of such a
post or organization if it meets the following requirements:
(1) It is affiliated with, and organized in
accordance with, the bylaws and regulations formulated by an
organization described in paragraph (a)(1) of this section,
(2) At least 75 percent of its members are either
war veterans, or spouses of war veterans, or are related to
a war veteran within two degrees of consanguinity (i.e., grandparent,
brother, sister, grandchild represent the most distant allowable
relationships),
(3) All of its members are either members of
an organization described in paragraph (a)(1) of this section,
or spouses of a member of such an organization or are related
to a member of such an organization, within two degrees of consanguinity,
and
(4) No part of its net earnings inures to the
benefit of any private shareholder or individual.
(e) Trusts or foundations. --A trust or foundation
may be exempt as an organization described in section 501(c)(19)
and paragraph (a)(2) of this section if it is a trust or foundation
for a post or organization of war veterans described in paragraph
(a)(1) of this section. A trust or foundation is a trust or
foundation for such a post or organization if it meets the following
requirements:
(1) The trust or foundation is in existence
under local law and, if organized for charitable purposes, has
a dissolution provision described in §1.501(c)(3)-1(b)(4),
(2) The corpus or income cannot be diverted
or used other than for the funding of a post or organization
of war veterans described in paragraph (a)(1) of this section,
for section 170(c)(4) purposes, or as an insurance set aside
(as defined in §1.512(a)-4(b)),
(3) The trust income is not unreasonably accumulated
and, if the trust or foundation is not an insurance set aside,
a substantial portion of the income is in fact distributed to
such post or organization or for section 170(c)(4) charitable
purposes, and
(4) It is organized exclusively for one or more
of those purposes enumerated in paragraph (c) of this section.
[Reg. §1.501(c)(19)-1.]
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