Treasury Defends Donor Disclosure Change
Agency says IRS no longer needs this information to operate
On July 26, 2018, President Donald Trump’s nominee to be deputy Treasury secretary defended the agency’s decision to scrap donor disclosure rules for most tax-exempt organizations.
Treasury and the Internal Revenue Service (IRS) announced the policy change last week, saying the IRS no longer has an administrative need for continuing the routine collection of donor names and addresses. Charities and section 527 political organizations, including political action committees, will continue to disclose names and addresses of donors; however, that requirement will no longer apply to other types of tax-exempt organizations.
“Unfortunately, I believe it’s become very politicized over the last few weeks but the intent was to further efficient tax administration,” said Justin Muzinich at his confirmation hearing before the Senate Finance Committee earlier today.
Democrats protested the administration’s decision last week by voting against Trump’s nominee to be IRS commissioner, Charles Rettig. Sen. Ron Wyden (D-OR), ranking member of Senate Finance, said the policy change encourages more “dark money” influence in politics.
“What this action has done is essentially blindfold intelligence officials and law-enforcement folks who want to combat foreign election interference,” Wyden said at today’s hearing.
Muzinich said the change was actually first recommended by former IRS Commissioner John Koskinen during the Obama administration.
Montana Governor Steve Bullock is suing the Treasury Department and the IRS for changing the donor disclosure requirements and has asked the U.S. District Court for the District of Montana to block the change from taking effect. The change, Bullock argued, was made without public notice or comment period, and “will frustrate Montana’s tax regime, impose substantial pressure on Montana to change its laws, and require Montana to expend substantial resources to develop new procedures for state determinations.”
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