IRS Nixes Plan to Collect Social Security Numbers of Donors
A wave of complaints forced the IRS on January 7 to withdraw its controversial plan to have nonprofit charities report the Social Security numbers of donors who give just $250 in any given year.
Fox News reports that under the proposed rule, the IRS would have created a voluntary system for nonprofits to collect and send the IRS personal donor information in their yearly report. The idea was to simplify the process for nonprofits—ranging from traditional charities to churches—and donors alike. However, lawmakers and nonprofits cried foul, and warned even a voluntary program could scare off donors who don’t want to give out their Social Security numbers. Plus there were concerns that nonprofits would need to beef up data security to protect the information from hackers.
A new IRS notice to be published in the Federal Register says that, in the wake of these complaints, the proposal is being pulled. “The Treasury Department and the IRS received a substantial number of public comments in response to the notice of proposed rulemaking,” the notice said. “Many of these public comments questioned the need for donee reporting, and many comments expressed significant concerns about donee organizations collecting and maintaining taxpayer identification numbers. … Accordingly, the notice of proposed rulemaking is being withdrawn.”
An IRS official confirmed to FoxNews.com that the plan was withdrawn in reaction to the public comments.
Note: AGRM was among the organizations making public comment, as noted in the most recent AGRM DC Briefing.