Conservatives Slam Proposed IRS Rule That Charities Collect Donors' Social Security Numbers
Thursday, 03 Dec 2015 07:36 PM
Conservatives and nonprofit groups Thursday slammed a proposed IRS rule that could require charities to collect and report Social Security numbers for donors who contribute $250 or more, with Washington attorney Cleta Mitchell expressing "shock and dismay" over the potential repercussions of such a requirement.
"I think about every little church, every charity that anybody gives money to," Mitchell told Newsmax in an interview. "How does any donor know whether a charity is going to be able to protect that information?"
Tim Delaney, president and CEO of the National Council of Nonprofits, said the proposal "would be devastating for nonprofits and the general public.
"Nonprofits will be hurt because people will be reluctant to make a donation if it means they have to share their private Social Security number, plus it will divert limited resources away from missions to invest instead in costly new data security," Delaney said.
"Likewise, the general public will be hurt when scam artists call up claiming to be nonprofits to get Social Security numbers so they can then steal identities and commit fraud."
Proposed in September, the regulation — which would be voluntary — could require charities to collect Social Security numbers along with other personal data from those contributing $250 or more.
For organizations opting to do so, they must collect the data, report it to the Internal Revenue Service — where it would be stored and used to verify taxpayer filing claims — and provide the donation information to taxpayers.
The public comment period ends on Dec. 16. If anyone requests public hearings on the proposed rule, they would be scheduled and notices would be published in the Federal Register.
The IRS proposed a similar rule in 2009, but rejected it after an investigation by the Government Accountability Office found — among other conclusions — that taxpayers might reduce their contributions "because they are reluctant to provide Social Security numbers to charities given concerns over identity theft."
Citing recent security breaches at the CIA and the U.S. Office of Personnel Management, Mitchell posed to Newsmax, "So, now you're going to create all sorts of new targets for identity thieves?
"Think of how expensive it would be for every church, every charity to try to come up with some way to protect these Social Security numbers," she added. "All anybody has to have for identity theft is my name, Social Security number, and date of birth.
"That's it. They don't even necessarily have to have my date of birth."
However, a broader danger exists, according to Mitchell: the IRS targeting conservative groups and their donors for audits, thus drying up contributions.
"I've seen ample evidence that the IRS has used donor information — people who contribute to conservative organizations or Republican candidates, causes — to go after those people and target them for audits," she said.
Mitchell represented many tea party groups in lawsuits against the IRS and the Obama administration who had been targeted for special scrutiny by the tax agency in their applications for nonprofit status for several years leading up to the 2012 presidential election.
In October, the Justice Department closed a two-year investigation into the scandal without charging former supervisor Lois Lerner, who headed the department that screened the applications, or anyone else at the agency.
"Is that what they're trying to do?" Mitchell asked. "Being able to discourage people from contributing to charitable organizations? Is that what they're trying to do, so there'll be fewer people taking the charitable deduction?
"What's the public policy purpose of this?"
"I think about every little church, every charity that anybody gives money to," Mitchell told Newsmax in an interview. "How does any donor know whether a charity is going to be able to protect that information?"
Tim Delaney, president and CEO of the National Council of Nonprofits, said the proposal "would be devastating for nonprofits and the general public.
"Likewise, the general public will be hurt when scam artists call up claiming to be nonprofits to get Social Security numbers so they can then steal identities and commit fraud."
Proposed in September, the regulation — which would be voluntary — could require charities to collect Social Security numbers along with other personal data from those contributing $250 or more.
For organizations opting to do so, they must collect the data, report it to the Internal Revenue Service — where it would be stored and used to verify taxpayer filing claims — and provide the donation information to taxpayers.
The public comment period ends on Dec. 16. If anyone requests public hearings on the proposed rule, they would be scheduled and notices would be published in the Federal Register.
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The IRS proposed a similar rule in 2009, but rejected it after an investigation by the Government Accountability Office found — among other conclusions — that taxpayers might reduce their contributions "because they are reluctant to provide Social Security numbers to charities given concerns over identity theft."
"Think of how expensive it would be for every church, every charity to try to come up with some way to protect these Social Security numbers," she added. "All anybody has to have for identity theft is my name, Social Security number, and date of birth.
"That's it. They don't even necessarily have to have my date of birth."
However, a broader danger exists, according to Mitchell: the IRS targeting conservative groups and their donors for audits, thus drying up contributions.
"I've seen ample evidence that the IRS has used donor information — people who contribute to conservative organizations or Republican candidates, causes — to go after those people and target them for audits," she said.
Mitchell represented many tea party groups in lawsuits against the IRS and the Obama administration who had been targeted for special scrutiny by the tax agency in their applications for nonprofit status for several years leading up to the 2012 presidential election.
"Is that what they're trying to do?" Mitchell asked. "Being able to discourage people from contributing to charitable organizations? Is that what they're trying to do, so there'll be fewer people taking the charitable deduction?
"What's the public policy purpose of this?"
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