IRS Privacy Reform a Long-Sought Victory for Free Speech

Nonprofit donor lists will no longer be needlessly warehoused by the feds

May 26, 2020   •  By IFS Staff   •  
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Washington, DC – The Institute for Free Speech released the following statement in response to today’s announcement that the IRS finalized a rule to protect the privacy of nonprofit donors.

“This is a great day for free speech. Americans can now support advocacy groups without worry that the IRS is looking over their shoulder. That will encourage more people to give and protect groups that criticize government,” said Institute for Free Speech President David Keating.

“The IRS doesn’t use this information to enforce the tax code. And the risk of accidental disclosures is higher than ever in the internet age. The Treasury deserves praise for enacting this reform and protecting Americans’ privacy. Everyone has the right to support social causes without being harassed,” said Keating.

The IRS previously required all nonprofits organized under Section 501(c) of the tax code to report the names and addresses of major donors on Schedule B of their annual tax forms. This information was not made public but was at risk of leaks and accidental disclosures by the IRS. Under the new policy, only 501(c)(3) charitable organizations will continue to report this information. These organizations are unique in that they offer donors a tax deduction and are the only nonprofits required by law to report their major donors to the agency.

The Institute for Free Speech filed two sets of comments in support of the rulemaking and testified before the IRS in February. The Institute’s comments noted that in the landmark case Buckley v. Valeo, the Supreme Court observed that it had “repeatedly found that compelled disclosure, in itself, can seriously infringe on privacy of association and belief guaranteed by the First Amendment.”

The new rule will still require nonprofits to list the largest amounts they receive from donors in public tax documents, but will discontinue the unnecessary and harmful disclosure of donor names and addresses to the IRS.

To read the new rule, click here. To read the Institute’s comments, click here and here.

About the Institute for Free Speech

The Institute for Free Speech is a nonpartisan, nonprofit 501(c)(3) organization that promotes and defends the First Amendment rights to freely speak, assemble, publish, and petition the government. Originally known as the Center for Competitive Politics, it was founded in 2005 by Bradley A. Smith, a former Chairman of the Federal Election Commission. The Institute is the nation’s largest organization dedicated solely to protecting First Amendment political rights.

IFS Staff

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