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Treasury Challenged on Donor Disclosure Decision

Senate Democrats seek greater insight on policy change

Senate Democrats continue to seek more information about the Treasury Department’s recent decision to revoke a long-standing requirement that certain tax-exempt organizations report the names and addresses of donors to the Internal Revenue Service (IRS). Last week, Sen. Ron Wyden (D-OR), ranking member of the Senate Finance Committee, sent a letter to Treasury Secretary Steven Mnuchin asking for a wide scope of information on the internal decision-making that led to Treasury’s decision last month to scrap donor disclosure requirements.

“Americans deserve to know who was involved in the secretive decision that threatens to further undermine our political system,” Wyden said in the letter. “The political brazenness of this action shocks the conscience.”

Wyden and other Senate Democrats are alarmed that 501(c)(4) political groups that are heavily involved in political ads for and against specific candidates can avoid identifying their donors to the IRS.

In announcing the change in policy, Mnuchin said the IRS has no administrative need for continuing the routine collection of donor names and addresses. If the information is needed for purposes of an examination, the IRS will simply ask the organization for it directly, Mnuchin said.

“It’s important to emphasize that this change will in no way limit transparency,” Mnuchin added. “The same information about tax-exempt organizations that was previously available to the public will continue to be available, while private taxpayer information will be better protected. The IRS’s new policy for certain tax-exempt organizations will make our tax system simpler and less susceptible to abuse.”

Charities and section 527 political organizations, including political action committees, will continue to disclose names and addresses of donors. Yet, the new rule will apply for other types of tax-exempt organizations beginning with Form 990 filings for the years after 2018.

This article was provided to OSAE by the Power of A and ASAE's Inroads.

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