The IRS regulatory assault on political nonprofits continues, albeit out of the media glare. In September the Internal Revenue Service and Treasury Department proposed a rule to give 501(c)(3) charities the “option” of filing detailed reports on every donor who contributes more than $250. These reports would include names, addresses and Social Security numbers. Oh, oh.
While the IRS says the rule is “voluntary,” in government that’s often a prelude to compulsory. The legitimate fear in the nonprofit world, on the right and left, is that this is a first step toward making such donor lists mandatory, and then applying the requirement to every nonprofit—including the conservative social-welfare organizations that the IRS helped to shut down in the 2012 presidential election.
Under current law, nonprofits must report only donors who give more than $5,000 a year, and then only names and addresses. Donors who give less than $5,000 to (c)(3) charities, and who want to claim a tax deduction, must obtain a “receipt” from the charity—to furnish to the IRS if they are audited or examined. This process has been in place for years, and even Treasury and the IRS acknowledge in their new rule that it “works effectively, with the minimal burden on donors and donees.”