IRS targets American Legion with demands for documents they don't retain

Washington Examiner:

New IRS demands that American Legion posts produce confidential documents they don't have in order to maintain their tax-exemption is a “disgusting” intrusion that could harm the charitable organization’s work for veterans, a top Legion official told the Washington Examiner.

Louis Celli, national legislative director of the Legion, stopped short of saying the IRS is “targeting” the organization for political purposes, as the tax agency admitted doing earlier this year Tea Party and other conservative groups seeking nonprofit status since 2010.

IRS auditors are now requiring local Legion posts to produce military discharge papers to document their members' years of service, something that had never been required since the organization was chartered by Congress in 1919, Celli said.

Posts that cannot produce the documents, called DD-214s, face fines of $1,000 per day. One post in Round Rock, Texas, already has been fined $12,000.

The Legion has historically maintained a roster of its 2.5 million members, and verified years of service when a member joins, Celli said. It does not keep the discharge documents, and that has always been good enough for the IRS.

But within the past few weeks, national Legion officials got word that auditors were asking local chapters for the discharge records and other documents for all active members.

Those documents include members' Social Security numbers and other personal information, including in some instances medical histories. The Legion does not keep the discharge papers and has no desire to do so, Celli said.

“The American Legion will never, ever, turn those documents over to the IRS with all of that personal information on it,” Celli said. “Forget it. It’s not going to happen.”
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I don't understand what the concern of the IRS is.  It is not like the American Legion is a subversive organization or one that is part of the Tea Party.  Could it be that some in the IRS are just hostile to veteran groups?