On Monday, the IRS announced changes to critical disclosure requirements. The new rules make it so tax-exempt groups under Section 501(c) will no longer be required to identify donors of $5,000 or greater on their tax returns, NPR reported.
According to NPR, “501(c)(3) charities will still have to identify their most generous donors to the IRS, but 501(c)(4) social welfare organizations and 501(c)(6) business associations will not.” Some examples of 501(c)(4) tax-exempt organization include the National Rifle Association and Koch-backed Americans for Prosperity. Many critics said this move will limit transparency because many of these groups have been proven to be “secretive political funds.”
“We need more transparency in our campaigns, not less,” Sen. Jon Tester, (D-Mont.), said in a statement.
But the IRS said the new rules will create a “significant reform to protect personal information.” Steven Mnuchin, Treasury Secretary, said it “will in no way limit transparency.”
While 501(c)(4) social welfare groups are on the rise, many have political interests that swing to the right, and the same goes for heavily financed 501(c)(6) business associations.
Yet, David Keating, president of the anti-regulation Institute for Free Speech, said “donor disclosure to the IRS ‘can easily be abused to suppress First Amendment rights,'” NPR reported.
“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.
While the groups will no longer be required to provide the identity of their donors, they “will still have to keep donor information in their own records and make it available for the IRS when the agency needs the information in audits of taxpayers,” The Hill reported.
“Trump’s Treasury Department made it easier for anonymous foreign donors to funnel dark [secret] money into nonprofits,” Sen. Ron Wyden, (D-Ore.), said in a statement.
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