Where is the IRS code for a veteran family member caregiver receive tax-free money?

Please see a tax preparer. They will be able to identify how to set your income and expenses associated with providing care up properly and advise whether the payments are deductible to the parent.

You can also read publication 907. I copied the following from IRS website. It is an from an overview of Publication 907.
Military and Government Disability Pensions
Generally, you must report disability pensions as income, but do not include certain military and government disability pensions. See Publication 525.
VA disability benefits. Do not include disability benefits you receive from the Department of Veterans Affairs (VA) in your gross income. If you are a military retiree and do not receive your disability benefits from the VA, see Publication 525 for more information.
Do not include in your income any veterans' benefits paid under any law, regulation, or administrative practice administered by the VA. These include:
Education, training, and subsistence allowances;
Disability compensation and pension payments for disabilities paid to veterans or their families;
Grants for homes designed for wheelchair living;
Grants for motor vehicles for veterans who lost their sight or the use of their limbs;
Veterans' insurance proceeds and dividends paid to veterans or their beneficiaries, including the proceeds of a veteran's endowment policy paid before death;
Interest on insurance dividends left on deposit with the VA;
Benefits under a dependent-care assistance program;
The death gratuity paid to a survivor of a member of the Armed Forces who died after September 10, 2001; or
Payments made under the VA's compensated work therapy program.
HOWEVER the payments made to a caregiver from this income ARE taxable.

I believe that the a and a as income TO THE VETERAN is tax free. But what is paid to the caregiver is HER income and would be taxed as such, I believe. But read 525.

Irs Publication 525.