By Peter Overby
The Trump administration has weakened a donor disclosure rule for tax-exempt groups, possibly letting more foreign cash into U.S. politics – and complicating the confirmation of a new IRS commissioner.
(Featuring Institute for Free Speech President David Keating)
By Peter Overby
Capital Research Center: InfluenceWatch Podcast Episode #33: The IRS Protects Free Speech? (In the News)
In this episode: Today we’re joined by Luke Wachob of the Institute for Free Speech to discuss the battle to protect anonymous political speech. This week the Treasury Department announced a victory that helps protect anonymity in IRS reporting, in an example of how small regulation changes can hugely protect freedom.
A few witnesses on panels on the first day of the hearing testified against additional regulations to address disclaimers on internet ads, including the first witness, Allen Dickerson, Legal Director of the Institute for Free Speech. Mr. Dickerson stated that the rulemaking was outside of the FEC’s authority. He noted that although the Supreme Court affirmed the disclosure and disclaimer regulations in Citizens United v. FEC, that case did not address video ads on the internet. He also testified that disclaimers hinder a speaker’s message and may result in a ban on speech. Ilya Shapiro, Senior Fellow in Constitutional Studies at the Cato Institute also focused his argument on First Amendment arguments against requiring disclaimers. According to Mr. Shapiro, disclosure requirements cause anxiety for speakers, and provide little value to voters. Using an analogy of medical disclaimers on television ads, he testified that more extensive disclaimers make them less likely to be read.
Dan Backer, Counsel for the Coolidge-Reagan Foundation, also emphasized that individuals will be burdened and speech hindered by additional disclaimers. He testified that the proposed regulations would exacerbate the divide between rich (who can hire lawyers to defend their First Amendment rights) and poor speakers. Mr. Backer proposed an expenditure threshold for disclaimers on certain internet communications. Victor E. Bernson, Jr., Vice President and General Counsel of Americans for Prosperity, said the Commission’s proposals would burden a speaker’s First Amendment rights. He asserted that the additional disclaimer requirements would primarily affect activists. Mr. Bernson testified that he favors a “less is more” approach and recommended a hybrid of the Commission’s proposals.
Filed Under: In the News
Washington Post: ‘Dark money’ groups don’t need to disclose donors to IRS, Treasury says (In the News)
By Michelle Ye Hee Lee and Jeff Stein
Nonprofits that spend money to influence elections but are not required to disclose donors to the public – called “dark money” groups by critics – no longer need to share their donors’ names or addresses in their tax filings under a new Treasury rule announced Monday…
Some nonprofits and free-speech advocates have long expressed concerns that the names and addresses may be used by the government to politically target the donors, noting previous scandals that found the IRS targeted tea party and progressive groups.
They also note the risk of donor information being released publicly by accident, either by the IRS or by the nonprofits.
Former IRS commissioner Mark Everson, now vice chairman of alliantgroup, said the agency’s requirement of this donor information was “an extension beyond its normal tax collecting duties.”
In a conference call Tuesday, senior Treasury officials said the new rule would help prevent the improper disclosure of donor information by the federal government.
The Treasury officials also stressed said the move would save thousands of organizations money by reducing their compliance costs and would save the IRS time by reducing paperwork.
“The IRS doesn’t use this information and has no need for this information,” said David Keating, president of the nonprofit Institute for Free Speech, which opposes limits on political speech.
By Peter Overby
Until now, tax-exempt groups under Section 501(c) of the tax code have had to identify donors of $5,000 or more on their annual tax returns. While the returns are public documents, the donor identifications are redacted when tax returns are made public. But the system isn’t foolproof. About six years ago, the IRS failed to redact the donor list for Crossroads GPS, a leading conservative group at the time.
Under the new rules, 501(c)(3) charities will still have to identify their most generous donors to the IRS, but 501(c)(4) social welfare organizations and 501(c)(6) business associations will not…
The IRS calls the move a “significant reform to protect personal information.” Treasury Secretary Steven Mnuchin said the change “will in no way limit transparency.” …
The new change is a small step in a conservative campaign to repeal disclosures and limits on advocacy money that doesn’t go directly to candidates or political parties. Donor disclosure to the IRS “can easily be abused to suppress First Amendment rights,” said David Keating, president of the anti-regulation Institute for Free Speech.
By Niels Lesniewski and Kate Ackley
Even as the new guidance from the IRS will allow some political groups to more easily shield their donors, some of the nation’s biggest lobbying groups, including the U.S. Chamber of Commerce, are calling on lawmakers to go even further.
“We now encourage Congress to take action to remove onerous donor disclosure requirements for tax-exempt organizations that were not covered by this important announcement,” chamber spokeswoman Blair Holmes said in a statement.
Holmes said the chamber applauded Treasury’s move, noting that it “will help ensure that sensitive donor information will not fall into the hands of those who wish to suppress the First Amendment right to free speech.”
Some House Republicans, led by Illinois Rep. Peter Roskam, have introduced legislation that would largely prohibit the IRS from collecting donor information from any nonprofit organization. The Institute for Free Speech, a group that opposes campaign finance restrictions, supports that measure.
“We applaud the Treasury Department and Secretary Mnuchin for its common-sense move to protect the privacy of Americans who give to nonprofits,” the institute’s president, David Keating, said in a statement. “Repealing that requirement will provide even greater protection to Americans’ privacy and freedom of association.”
By Andrew Kerr
“Americans shouldn’t be required to send the IRS information that it doesn’t need to effectively enforce our tax laws, and the IRS simply does not need tax returns with donor names and addresses to do its job in this area,” Mnuchin said…
“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.”
The move was hailed by conservative groups as a victory for free speech. Conservatives have argued that donor information supplied to the IRS is susceptible to leaks.
“We applaud the Treasury Department and Secretary Mnuchin for its common-sense move to protect the privacy of Americans who give to nonprofits,” Institute for Free Speech President David Keating said in a statement Tuesday. “It has become increasingly clear that the mass collection of this highly personal information is not necessary to enforce tax laws or conduct investigations. Moreover, it can be easily abused to suppress First Amendment rights.”
Their fears aren’t unwarranted – the IRS has leaked confidential nonprofit documents to the public in the past. The identity of major donors to the conservative National Organization for Marriage was leaked to the Human Rights Campaign, a pro-same sex marriage group, from someone within the IRS in 2012. The IRS admitted it wrongfully released the group’s donor information in 2014.
While “dark money” groups are no longer required to disclose the names and addresses of their contributors to the IRS, they will still need to keep records and make donor information available to tax authorities upon request in the event of an audit.
By Madeline Fry
The San Antonio, Texas City Council approved an ordinance that will require political campaigns to collect and disclose the names, employers, and occupations of individuals donating $100 or more to candidates running for city office…
Bradley A. Smith, a professor of law at Capital University Law School and a policy advisor for The Heartland Institute, which publishes Budget & Tax News, says San Antonio’s new campaign-finance rules will facilitate political vigilantism and silence less-powerful people.
“In various states, people have been hounded from their jobs, and by that, I mean their employers have been boycotted or picketed until finally the employer has to fire the person or the person quits,” Smith said. “We live in an era of Twitter mobs, where all kinds of information can be found out almost instantaneously, so I think it’s probably as important as it’s ever been for the ability of people to support unpopular causes and to voice different opinions that are out of the ordinary, without fear of people retaliating against them.” …
Smith says blanket campaign-finance laws such as San Antonio’s unnecessarily intimidate people who have little political power.
“How many people say, ‘When I make a political contribution, I’m speaking for my employer’?” Smith said. “If we’re talking about the CEO of a big corporation who’s giving $5,000 or $10,000 or something like that, that can be easily found out. If you have somebody who’s an assistant manager at a bank and he writes a check for $100 to a City Council candidate, is this going to help us fight corruption or learn the candidate could be beholden to the banking industry?”
By Eric Peterson
The FEC recently heard testimony on two proposals to require disclaimers on online political advertisements. (My employer, the Institute for Free Speech, was one such group.) These dueling options concern only paid ads that specifically endorse or oppose a candidate for office.
At the hearing, some urged the agency to adopt a flexible approach for both speakers and websites hosting political ads. Others supported requiring disclaimers even when a person shares promoted content organically…
The commissioners seemed to agree on a need for a new rule. But it’s unlikely that any proposal will be agreed to and implemented before the midterms. Yet, despite the lack of a new rule, online political ads are already much more heavily regulated than they were in 2016.
Facebook, Twitter, and Google recently rolled out new policies for online ads and promoted content on political issues or candidates. In addition, three states (Maryland, New York, and Washington) have enacted strict laws for Internet ads…
The steps taken by the big three companies are certainly not immune from criticism. But their leaders are aware that they must strike a balance between competing priorities. They must weigh allowing viewers to have more information about ads while not overburdening those who want to speak. These companies know their platforms best and can tailor solutions to address the needs of various parties while fixing any issues.
With this in mind, the FEC’s goal should be maximizing the ability of Americans to speak about the causes about which they are passionate. This means using the lightest regulatory touch possible, promoting flexibility, and allowing companies to come up with solutions that fit their unique platforms.
Puget Sound Business Journal: Opinion: Google’s political ad ban gives incumbents a big boost (In the News)
By Scott Blackburn and Dann Mead Smith
Now that Google is banning political ads in Washington, newer candidates will have a harder time getting their campaigns off the ground, Scott Blackburn and Dann Mead Smith argue.