Bill Protecting Nonprofit Donor Identities From IRS Passes Committee

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Juliegrace Brufke Capitol Hill Reporter
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The House Ways and Means Committee advanced a bill Thursday preventing the Internal Revenue Service (IRS) from collecting personal information of those donating to tax-exempt nonprofits.

Subcommittee on Oversight Chairman [crscore]Peter Roskam[/crscore], the architect of the Preventing IRS Abuse and Protecting Free Speech Act, said the agency has failed safeguarding personal data in the past and shouldn’t receive sensitive information that isn’t necessary for it to carry out its job.

“In the past the IRS has improperly accessed and released to the public information from a tax-exempt organization Schedule B, most notably – in full discussion of this committee in the past – the National Organization for Marriage had its schedule b leaked to the press in 2012,” he said, adding he believes the measure would put an end to the issue.

Tax-exempt organizations are required to fill out 990 forms, which allow the agency to determine if the nonprofits are meeting the requirements for tax-exempt status. 501(c)(3)s, meanwhile, are also required to fill out Schedule B forms detailing the information of donors who gave $5,000 or more. The information on the Schedule B is not used for tax administration purposes – a caveat Republicans are unhappy with especially in the wake of the Lois Lerner scandal.

“As we have seen over the last several years, the IRS has exploited sensitive taxpayer information to penalize tax-exempt organizations that do not align with certain political beliefs,” Chairman [crscore]Kevin Brady[/crscore] said in his opening statement. “By eliminating invasive reporting requirements in current law, this legislation will protect taxpayers’ identities and prevent the IRS from improperly targeting particular organizations.”

Democrats slammed the legislation, saying it would enhance the effects seen from the 2010 Supreme Court ruling on Citizens United.

“It is no secret as to why they are working to keep donors a secret – the three largest spenders from 2012 – representing fully 51 percent of the total – include Karl Rove’s Crossroads GPS spent $71 million; Americans for Prosperity, the Koch brothers, spent $36 million; and the American Future Fund, also the Koch brothers, spent $25 million,” Ranking Member Sandy Levin said in his opening remarks.

Roskam said in the past that the IRS has considered doing away with the policy and it would help eliminate fraud.

Under the legislation, top employees at nonprofits would still have to provide the information if they donate $5,000 or more.

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