The IRS Takes Up The War On Veterans

“The IRS now requires American Legion posts to maintain dates of service and character of service records for all members… The penalty for not having the required proof of eligibility is, apparently, $1,000 per day,” the American Legion stated. The VFW is also bound by the same dictate from the tax code. This would appear to be under “Exempt Organizations Examination Guidelines,” which is the jurisdiction of Exempt Organizations head Lois Lerner.
Excuse me but where does the IRS find the chutzpah to demand that the American Legion and VFW reveal private information about its membership? Has not the Department of Homeland Security done enough to demean veterans by labeling them as potential terrorist?
Yes indeed veteran groups have been singled out for audits. From Weaponsman;

All of the tax-exempt veterans’ organizations in one large state were audited. All of them. (This requires a huge expenditure of government resources. ) That includes the state organizations and, where the real focus of IRS hostility has landed, the individual local posts. Yes, one organization at least has had every one of its posts in this populous blue state audited, and the audits have been brutal.
Over half of the audited posts have had their tax-exempt status yanked, and have had to pay tens of thousands in back taxes, penalties, fees and, of course, accountants’ and lawyers’ expenses.
In at least one case, the IRS has gone back eight years on one local chapter, the nature of which is that the leaders and treasury managers from 2005 may now rest in Arlington.

The large blue state that weaponsman referred to may have been Maryland. The Baltimore Sun, hardly a right wing publication reported;

Dozens of veterans groups across Maryland are threatened with the loss of their tax-exempt status and may owe the government hundreds of thousands of dollars in back taxes as a result of an investigation by the Internal Revenue Service.
In an aggressive sweep that began in Maryland more than two years ago and is now being watched nationally, investigators with the IRS district office in Baltimore have audited at least 29 Veterans of Foreign Wars and American Legion posts across the state.

There is some discussion about illegal gambling in some of the posts but the IRS has never taken such extreme measures in the past. The Sun goes on to report that the IRS investigation may have spread to Pennsylvania and beyond.

A national VFW spokesman in Kansas City said the group was monitoring the Maryland investigation because some of the issues raised could have implications for posts across the country.
"The IRS is stepping into something they have not addressed previously," said spokesman Steve Van Buskirk.
Although the findings vary from post to post, the IRS investigators found similar alleged tax violations at many of the clubs.
The agency found, for example, that all 17 VFW posts that were audited should have been paying taxes on the proceeds from their bar operations -- concluding that many groups have become little more than taverns for their members.
Membership questions
The IRS also took issue with the membership policies at many posts. Eleven of the 17 VFW posts accepted so-called "social members," who wouldn't normally qualify for membership as war-time veterans, investigators found.
God forbid veterans should a quiet place to drink and maybe even smoke. If any fraternal groups such as the Moose, Owls, or Eagles have been the target of the IRS it has not been reported.