Paul L. Caron
Dean


Tuesday, May 17, 2016

The IRS Scandal, Day 1104

IRS Logo 2Wall Street Journal editorial:  The IRS’s Donor Lists: Congress Should Keep the Names of Donors Out of Tax Returns:

Democratic Attorneys General in California and New York have been trying to get their hands on donor information in the tax returns of nonprofit groups. Their disclosure demands were recently shot down in a California federal court, but the better question may be why the IRS is even collecting the info.

Under the Tax Reform Act of 1969, 501(c) groups are required to file Form 990 Schedule B that lists the sources of donations of more than $5,000 in the previous calendar year. The lists are supposed to remain private, but this is the government we’re talking about. The National Organization for Marriage’s donor list leaked to the Human Rights Campaign in 2012, and the state of California recently posted some 1,400 Schedule Bs on Attorney General Kamala Harris’s public website, though they were quickly taken down.

Sloppy handling of data that includes home addresses threatens donors with potential harassment. In his April order in AFPF v. Harris, the case challenging Ms. Harris’s appeal to see unredacted donor information from nonprofits, federal Judge Manuel Real noted that the disclosures included donors for Planned Parenthood of California. “An investigator for the Attorney General,” Judge Real wrote, “admitted that ‘posting that kind of information publicly could be very damaging to Planned Parenthood.’”

That goes across the political spectrum, which may be why IRS head John Koskinen and Director of Exempt Organizations Tamera Ripperda have said even the IRS is debating whether the information is necessary for tax enforcement.

Meanwhile, Illinois Republican Peter Roskam’s bill to stop the IRS from collecting donor details of tax-exempt groups passed the Ways and Means Committee in late April. Progressive groups, such as Democracy 21 and Public Citizen, say Schedules Bs are important to protect against foreign donations to tax-exempt groups.

But dropping Schedule Bs wouldn’t change the law. There is no ban on foreign contributions to tax-exempt outfits—see the Clinton Foundation—but there is a blanket ban on foreign money being spent to influence U.S. elections. Audits can determine if foreign contributions are being channeled into politics. Lawbreakers trying to skirt election laws aren’t disclosing improper donations on tax returns in any case.

The real progressive interest in donor disclosure is to use the information as a political weapon. Leaked selectively, donor lists suppress the speech of political rivals. Mr. Roskam’s bill is worth moving to the House floor.

https://taxprof.typepad.com/taxprof_blog/2016/05/the-irs-scandal-day-1104.html

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Comments

The real progressive interest in donor disclosure is to use the information as a political weapon. Leaked selectively, donor lists suppress the speech of political rivals.

Does anyone honestly doubt this? If so, would they doubt it if the shoe were on the other foot?

Posted by: AMTbuff | May 17, 2016 8:52:44 AM