IRS won’t require donor disclosures anymore
Watchdog groups warn of election infiltration
WASHINGTON – The Trump administration will no longer require some taxexempt organizations, including politically active groups such as the National Rifle Association, to identify their contributors to federal tax officials.
The policy, announced this week by Treasury Secretary Steven Mnuchin, achieves a goal of some conservative groups who say donor disclosure, even to the IRS, could subject their contributors to government intimidation and harassment.
The change drew protests Tuesday from campaign finance watchdogs, who said it strips the government of its ability to scrutinize those donations and could lead to foreign interests illegally infiltrating U.S. elections through advocacy groups – as the country grapples with Russian interference in the 2016 presidential contest.
“This is the theater of the absurd,” said Fred Wertheimer of the watchdog group Democracy 21. “By limiting donor disclosure to the IRS, they have limited any ability to prevent Russia and Russian oligarchs to launder unlimited, undisclosed and illegal contributions through advocacy groups into federal elections.”
It also set up an immediate campaign finance battle on Capitol Hill as the midterm congressional elections heat up.
Senate Majority Leader Mitch McConnell, R-Ky., celebrated the administration’s move from the Senate floor, saying it bars the government from improperly using its power to “invite harassment of citizens” by “angry left-wing activists.”
The top Democrat on the Senate Finance Committee, Oregon Sen. Ron Wyden, said he would oppose Trump’s nominee to run the IRS, California tax lawyer Charles Rettig, unless the administration revoked the new policy.
“It’s the latest attempt by Secretary Mnuchin and Donald Trump to eliminate transparency and keep officials and lawmakers from following the money,” Wyden said.
The change will affect labor unions, social clubs, trade organizations and politically active advocacy groups, ranging from Planned Parenthood Action Fund to parts of the influential conservative network overseen by Kansas billionaire Charles Koch.
The names of donors to these nonprofit groups have not been publicly available, but the organizations were required to disclose contributor information to the IRS on their annual tax returns.
These groups generally do not operate as charities, and their donors do not receive tax deductions in exchange for their contributions.
As a result, Mnuchin said, the IRS doesn’t need their donor information to police tax laws. The tax agency still can ask the organizations for details on contributors if additional scrutiny is warranted.
“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 in a statement.
Officials affiliated with Koch long have pushed for this change and lobbied on behalf of a bill that passed the House in 2016 that would have kept donors anonymous.