Following the introduction by U.S. Sen. Pat Roberts (R-KS) of legislation in December that would block a proposed Internal Revenue Service (IRS) rule that threatened the privacy and security of charitable donors, the IRS scrapped the proposal entirely on Thursday.
“I am pleased the IRS has listened to reason and has scrapped this plan,” Roberts said. “The rule would have had a chilling effect on charitable giving and would have added a costly burden to charitable organizations.”
Originally proposed by the IRS in September, the rule would have called on charities to ask for additional personal donor information, including Social Security numbers, for donations of more than $250.
The responsibility to substantiate contributions is on the donor under current law, with most non-profits providing such information to donors for their personal records.
Robert said that, in addition to the burden the rule would place on charitable organizations and their donors, the rule was concerning because of recent IRS actions surrounding the targeting scandal and failures to protect private taxpayer information from hackers.
“Given that the agency has not yet adequately addressed the issues surrounding breaches of existing taxpayer information, a point the IRS readily acknowledges, and states that the existing system of substantiating charitable contributions works well, there was no compelling tax administration or enforcement reason to move forward with this proposal,” Roberts said.