A bill introduced on Friday by U.S. Sen. Pat Roberts (R-KS) would block a proposed Internal Revenue Service (IRS) regulation that could threaten the privacy and security of charitable donations.
Under a new proposed IRS voluntary rule, charities would seek additional personal donor information, including Social Security numbers, for any donation totaling more than $250.
“The rule would provide the IRS detailed information on who is making donations to particular charities,” Roberts said. “The IRS has already threatened donors in groups that it doesn’t like. I don’t think we can trust them with a new source of data on donors. There also is no assurance that the agency will stop at this voluntary rule and move to make such reporting mandatory for all contributions and all charities.”
The current law places the burden of substantiating a contribution on the donor. That information is generally provided by non-profits to donors for record-keeping purposes.
Under the proposed IRS regulation, however, charities could substantiate charitable contributions by filing an IRS return that includes detailed donor information. If a return is filed, the charity would be required to provide the name and address of the donor, the donor’s Social Security number, the amount of cash given and a description of any other contributed property. Charities would also be required to report if they provided any goods or services in consideration of the contribution and a description and good faith estimate of the value of any goods or services provided by the charity.
“This rule could dramatically reduce people’s willingness to make donations, and burden charities, many of which are small, volunteer operated organizations with new costly administrative costs,” Roberts said. “The collection and safekeeping issues surrounding this proposal could very significantly stress the good works done by our charitable sector.”