The Honorable Peter Roskam
United States House of Representatives
2246 Rayburn House Office Building
Washington DC 20024
Dear Congressman Roskam:
On behalf of the members of National Taxpayers Union (NTU), I write in support of your legislation, H.R. 5053, the “Preventing IRS Abuse and Protecting Free Speech Act.” This bill would amend the Internal Revenue Code of 1986 to prohibit the Secretary of the Treasury from requiring 501(c) tax-exempt, nonprofit organizations to divulge the identities of their donors in their annual returns.
Recently, the Internal Revenue Service (IRS) proposed a voluntary plan to allow charitable organizations to substantiate donations by submitting a report to the IRS which would include, among other personal information, the donor’s Social Security Number. NTU was pleased that the IRS wisely chose to abandon this plan as the rule posed numerous risks for privacy and could have exposed individuals to an increased threat of identity theft.
Federal agencies have proven to be vulnerable to hacks and other exposure of personal information. The tax-filing apparatus itself has been the target of identity thieves. Between hacking incidents, fraudulent preparers, information intercepted through the mail, and other schemes, the number of taxpayers experiencing some kind of identity theft exceeded 2.4 million in the most recent available year. IRS employees have filed fraudulent Federal income tax returns and accidently leaked the personal information of taxpayers. The IRS has even leaked the donor list of a nonprofit organization.
Given the poor track record of the IRS in safeguarding confidential information, nonprofits and taxpayers can have little confidence that the personal information of donors will be treated with due discretion. In addition, the IRS’s past discriminatory methods for determining the tax status of not-for-profit organizations raises questions about the prudence of further empowering this untrustworthy agency.
Finally, the threat of reporting additional donor information to the IRS would have created a significant barrier to donating and a chilling effect on the free speech of both individuals and nonprofit organizations. It’s clear that based on past IRS actions, that the agency is determined to impose more restrictions on 501(c) organizations and the donors who support them. Already, nonprofits are required to report the origins of “substantial” gifts to the IRS, submitting annual Schedule B Form 990s that identify contributors who give $5,000 or more.
H.R. 5053 would eliminate both the current Schedule B requirements and help pre-empt further violations of taxpayers’ privacy and freedom of speech by the IRS. This is a critical step to protect taxpayers, rein in the IRS, and help preserve the robust charitable sector that serves such an essential role in our society.
NTU is pleased to endorse H.R. 5053 and encourages all Representatives to cosponsor your bill and work towards its swift passage.
Federal Affairs Manager