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Non-Profits Unhappy With IRS Proposed Rule On Charitable Giving

(Photo: Mark Wilson/Getty Images)

Kerry Picket Political Reporter
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Non-profit groups are crying foul at the Internal Revenue Service’s proposed rule that would give organizations the option to collect and send to the IRS the social security numbers of their donors who give $250 or more.

Although the rule under consideration is optional for now, organizations are concerned the IRS may require them to collect and send such information to the agency in the future.

According to the proposed rule, “the collection of information is necessary to properly substantiate charitable contribution deductions under the exception to the general requirements for substantiating charitable contribution deductions of $250 or more.”

Organizations that are 501(c)(3) groups include charities, religious organizations, and universities. A non-profit contributor can claim a deduction on their annual income taxes from their donation to the organization. Those opposing the rule appear to come from all areas of the political spectrum.

“This is a huge issue for nonprofits — and the American public,” Tim Delaney, CEO of the National Council of Nonprofits, which opposes the rule, told Fox News.

Currently, organizations are only required to send a contributor who gives $250 or more “contemporaneous written acknowledgement (CWA)” which shows how much was donated and if any services or gifts received in return.

The rule under consideration by the IRS would instead, if a 501 (c)(3) decides to, require the organization to send donors’ social security numbers to the IRS on a form to the agency every year by February 28. Each donor would receive a copy of what is sent to the IRS.

“This is part of the IRS’s continued efforts to reduce the reach and effectiveness of non-profit organizations. Many of you will remember the proposed regulations from last year that would have narrowly defined ‘social welfare’ to shut down conservative organizations critical of the IRS,” stated Freedom Works, a 501c3 organization, about the rule.

Additionally, concerns about privacy and hacking of personal information could keep nonprofits away from asking their donors for their social security numbers to deliver to the IRS later on.

Republican media specialist, T.J. McCormack, told Fox News “there is a dog whistle aspect to this.”

“Everybody knows that everybody’s being hacked, and it’s just a little uncomfortable,” he said. “And there’s also this feeling that the government is overreaching…. and that still leaves a little bit of a bad taste in everybody’s mouth.”

Basil Smikle, the executive director of NYS Democratic party, agreed telling Fox News, “I do think the nonprofit lobby in this will push back really hard. My guess is that they will succeed,” he said.