Trump Administration Weakens Political Nonprofit Disclosures

Jul 19, 2018
Originally published on July 19, 2018 10:00 am
Copyright 2018 NPR. To see more, visit http://www.npr.org/.

DAVID GREENE, HOST:

The timing could have been better for the IRS. This week, the IRS announced that it is going to stop collecting the names of big donors to political nonprofit groups. That caused a controversy just in time for today's meeting of the Senate Finance Committee, where it plans to vote on confirming the tax agency's new chief. Here's NPR's Peter Overby.

PETER OVERBY, BYLINE: Among the nonprofit groups affected by the rule change are so-called social welfare organizations, such as the National Rifle Association, and business groups - for instance, the U.S. Chamber of Commerce. In politics, they're sometimes called dark-money groups because unlike candidates and party committees, they don't publicly identify their donors. Now these nonprofits can stop listing big donors on your tax returns, too. Oregon Senator Ron Wyden, the Finance Committee's ranking Democrat, quickly framed the change in terms of the Russia investigation.

RON WYDEN: The Trump administration has handed Russia the ability to funnel money into groups like the NRA completely undetected.

OVERBY: The IRS announcement came on Monday, the day after the FBI arrested a Russian national known for her close ties to the NRA. The charges against her do not involve contributions. Wyden said he'll oppose the nominee, tax lawyer Charles Rettig, so he perhaps can force more debate on the rule change.

WYDEN: Before Monday, the large donors were disclosed to the IRS. Now the large donors aren't disclosed to the IRS. That's the big difference.

OVERBY: It's a good difference for Senate Majority Leader Mitch McConnell.

(SOUNDBITE OF ARCHIVED RECORDING)

MITCH MCCONNELL: The identity of the donors to these organizations is not necessary for accounting and is not required for public inspection by the Internal Revenue Code.

OVERBY: McConnell discussed the change on the Senate floor.

(SOUNDBITE OF ARCHIVED RECORDING)

MCCONNELL: We know exactly why many on the left are keen to bureaucrats to have this confidential information. Where it leads, Madam President, is Americans being bullied for exercising their First Amendment rights.

OVERBY: The IRS has been collecting all this donor information for decades. It justifies the rule change now by saying it doesn't use the information anyway and reporting it is a burden on the organizations. David Keating is president of the Institute for Free Speech, which considers this a First Amendment issue.

DAVID KEATING: Why do we want the government creating a national database inside the IRS about which people are supporting, you know, which organizations, which unions? I mean, it just seems like a crazy idea.

OVERBY: This change marks another move by the IRS away from enforcing the rules for political nonprofits. Philip Hackney is a law professor and former IRS official. He said big donors will benefit and perhaps foreign donors, too.

PHILIP HACKNEY: If you're interested in prosecuting individuals for foreign money being contributed to these organizations improperly, you're giving up one actual hook for prosecuting those types of things.

OVERBY: The hook is the organization's tax return. It has to be signed under penalties of perjury, and it used to include the names of all the big donors.

HACKNEY: It'll be much harder to bring those types of prosecutions, so I think they're being foolish in that choice.

OVERBY: So the most generous givers in politics will be that much more secure in their anonymity. Peter Overby, NPR News, Washington.

(SOUNDBITE OF STS9'S "GOLDEN GATE") Transcript provided by NPR, Copyright NPR.