Some donors can drop IRS disclosure

The Trump administration will end a long-standing requirement that certain nonprofit organizations disclose the names of their large donors to the IRS, a move that will allow some political groups to shield their sources of funding from government scrutiny.

The change, which has been long sought by conservatives and Republicans in Congress, will affect labor unions, social clubs and, most notably, many political groups like the National Rifle Association and the Koch network’s Americans for Prosperity, which collect what is known as “dark money.”

Treasury officials said the reporting change would protect privacy and reduce compliance costs for nonprofits, and that the IRS still could request donor information from groups in the rare event that it was needed for tax scrutiny.

“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,” Treasury Secretary Steven Mnuchin said in a statement.

But critics denounced the measure, saying it increases the likelihood of illegal donations.

Previously, nonprofits such as unions and organizations classified as 501(c)(4) groups were required to report to the government the names of donors who contributed more than $5,000 in a year. That information was redacted on the publicly viewable forms the groups file annually, though amounts of donations remain visible.