WASHINGTON, DC – U.S. Senator Pat Roberts (R-Kan.) today announced that he has introduced a bill to block a proposed Internal Revenue Service (IRS) regulation that could have a chilling effect on charitable giving and would add a costly burden to charitable organizations.

The IRS is proposing a new voluntary rule that calls on charities to ask for additional personal donor information including Social Security numbers for any donation more than $250.00.

“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.”

Senator Roberts spoke on the Senate floor about the bill. For audio and video to download go here.

Under current law, the responsibility to substantiate the contribution is on the donor. Most non-profits provide that information to the donors for their record-keeping.

Instead, the proposed IRS regulation would allow a charity to substantiate charitable contributions by filing a return with the IRS that includes detailed donor information. If the charity elects to file the return, it must provide: the donor’s name and address, the donor’s Social Security number, the amount of cash and a description of any property other than cash contributed, whether the charity provided any goods or services in consideration for the contribution, and a description and good faith estimate of the value of any goods or services provided by the charity.

“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 is no compelling tax administration or enforcement reason to move forward with this proposal.”

Senator Roberts’ bill simply blocks the proposed rule from taking effect and maintains current law.

Charitable organizations are speaking out against the IRS proposal. Tim Delaney, president and CEO of the National Council of Nonprofits, recently wrote: “…the IRS proposal would open the door for scam artists…Nonprofits have neither the financial resources nor sufficient staffing to combat hackers who will see an easy source for Social Security information. This also creates a liability nightmare for innocent nonprofits…To be asked to share their address, their credit card number and their Social Security number all in the same place would be enough to scare even the most committed donor to decline to give.”

“This rule is ridiculous. If the intent is to crack down on fraud, the IRS should not create rules that will add to the problem,” Roberts said. “They have already proven that the IRS itself can’t safeguard personal and private information from abuse. Why would they burden non-profits with this collecting information that will be expensive to keep, could discourage donations and would encourage hacking?”

Senator Roberts went on to say, “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. The collection and safekeeping issues surrounding this proposal could very significantly stress the good works done by our charitable sector.”

Delaney made a similar point, stressing “Every donation not given means another senior who won’t receive a meal, a child who won’t receive life-saving medical care, another animal without a home, and much more.”

Those wishing to share their concerns with this proposed rule can issue comments here.

Senator Roberts has been an outspoken critic of the IRS. Earlier this year, Roberts took aim at the scandal-ridden IRS by introducing a bicameral bill with Senator Jeff Flake (R-Ariz.), Speaker Paul Ryan (R-Wis.), and Congressman Peter Roskam (R-Ill.).  The Stop Targeting of Political Beliefs by the IRS Act would stop cold further attempts by IRS to exploit bureaucratic loopholes to restrict the free speech rights of the same types of tax-exempt social welfare organizations victimized in the IRS political targeting scandal.

Senator Roberts also introduced the “Federal Employee Tax Accountability Act” to require federal employees to be current on their federal income taxes, and would prevent federal personnel who are delinquent in paying a federal tax liability from receiving a bonus or cash award. Exceptions are made for tax debt being paid pursuant to an agreement with the IRS and for certain hardships. According to the Inspector General, close to $3 million was awarded to IRS staff with violations on their records, with about half of that amount going to people with tax violations on their record.

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