TaxProf Blog

Paul L. Caron
Dean





Sunday, May 1, 2016

The IRS Scandal, Day 1088

IRS Logo 2CBS News, Koch Brothers Push Forward Efforts To Hide Nonprofit Donors’ Identities:

The billionaire Koch brothers are pushing ahead in their efforts on both the state and federal level to hide the identity of donors to nonprofit groups.

A week after a conservative advocacy group, backed by the Koch brothers, convinced a federal judge in California that it shouldn’t have to reveal the identities of its donors to California officials, a U.S. House panel approved a bill on Thursday that would shield from the Internal Revenue Service from the names of donors to nonprofit organizations.

Critics say review by the IRS is key to ensuring that foreign funds don’t covertly enter U.S. election politics.

On April 21, Americans For Prosperity Foundation, a nonprofit group backed by billionaire brothers David and Charles Koch, claimed victory when a federal judge in California issued a ruling that California Attorney General Kamala Harris did not have a right to know the identities of that group’s donors.

Harris plans to appeal that ruling. ...

Then, on Thursday, a bill titled Preventing IRS Abuse and Protecting Free Speech Act, went to the U.S. House of Representative’s Ways and Means Committee where the committee approved the bill 23-15, with all members of the committee voting along party lines. All those in favor of the legislation were Republican.

The legislation aims to eliminate what the Republican-led Ways and Means Committee dubbed a “superfluous IRS form, known as the Schedule B, that the IRS has used to improperly target tax-exempt organizations.” The legislation would ban the IRS from collecting the identity of nonprofit organizations’ donors.

A letter from Koch Companies Public Sector president Phillip Ellender on Thursday argues in favor of the bill, saying:

The targeting of non-profit organizations by the Internal Revenue Service (IRS) to limit free speech under this Administration is well documented. From the IRS subjecting donors of nonprofit organizations to the gift tax, to the direct targeting of conservative non-profit organizations based solely on their beliefs, this legislation could not be more pertinent. Considering the pair of reports released earlier this year by the Government Accountability Office (GAO), it’s even more pressing. The GAO found serious internal control flaws within the IRS that could allow the agency to continue its targeting of certain Americans for audit ‘based on an organization’s religious, educational, political, or other views.'

Prior to the committee’s Thursday vote, groups critical of the legislation, including the nonprofit organizations Democracy 21, Brennan Center for Justice, Campaign Legal Center, Public Citizen, and the Sunlight Foundation, among others, penned a letter to the members of the House Ways and Means Committee warning that the bill “would open the door wide for secret, unaccountable money from foreign governments, foreign corporations and foreign individuals to be illegally laundered into federal elections through 501(c)(4) groups.”

https://taxprof.typepad.com/taxprof_blog/2016/05/the-irs-scandal-day-1088.html

IRS News, IRS Scandal, Tax | Permalink

Comments

Mr. sw: You should know better than to pose serious and/or thoughtful questions to the right-wingers. It's pointless.

Posted by: Publius Novus | May 3, 2016 7:36:35 AM

sw, Maybe the Democrats should have thought about that when they tried to improperly obtain and use the information for their own partisan purposes. Now they've created a backlash that may go too far. Though it would seem to be an easy enough amendment to only shield domestic contributors, and not foreign ones.

Posted by: ruralcounsel | May 2, 2016 9:32:01 AM

Given that this legislation would appear to help shield the identification of foreign funds entering our political system, what would those on the right do to prevent this, assuming they think it is important to keep foreign funds out of our political system?

Posted by: sw | May 2, 2016 6:00:38 AM

woodun, it wouldn't matter if progressive donors were exposed. Nobody will harass them or get them fired. Those consequences will always fall only on conservative donors. That's why an ostensibly evenhanded policy of exposure has a one-sided result. It's rather insidious.

Posted by: AMTbuff | May 1, 2016 8:54:32 PM

What Democrat non-profit activist groups are being asked for their donor records by Kamala Harris (D)?

Are any of the groups that organized the violent attack on Trump's campaign event going to be investigated for not only participating in politics but inciting violence?

Tens of thousands of Democrats are celebrating May Day today and celebrating socialism. Is it too hard for our government or the media to notice the Democrats are emulating the tactics used by an ideology responsible for the deaths of over a hundred million people and the suffering and persecution of hundreds of millions more?

Posted by: wodun | May 1, 2016 3:17:23 PM

Totalitarians always need to know who their enemies are. Then just a few public executions will suffice to keep everyone in line.

Brendan Eich has shown why disclosure of donors will have the effect of suppressing political dissent, whether that result is intended or not.

Posted by: AMTbuff | May 1, 2016 9:35:48 AM