Leave New IRS Free Speech Rule in Place
We cast our ballots in secret. Our right as individuals to vote privately, with no one looking over our shoulder, is ingrained in our collective political consciousness. So why does that same principle not apply to the act of choosing to support candidates or causes with our hard-earned dollars? Shouldn’t we be able to support the causes of our choosing without having to worry about opponents learning about it, so they can intimidate or harass us?
That’s a question for Senate Democrats as they push for passage of a resolution that would overturn a rule recently promulgated by the Internal Revenue Service effectively shielding from public scrutiny the names and addresses of significant donors to nonprofit groups.
That new IRS rule – Revenue Procedure 2018-38 – exempts certain tax-exempt organizations that are not 501(c)(3) organizations from the requirement to report on their tax returns the names and addresses of their contributors who donate more than $5,000 in a given year. Such organizations are still required to maintain the records, in order to make them available to the IRS on request, but no longer will they have to include the information on their tax returns.
That new rule – a boon to free speech – made perfect sense when it was proposed in July of this year. The donor information was already required to be kept confidential, and was irrelevant to the administration of the tax system anyway, according to the IRS. Maintaining the confidentiality of the donor information was a burden to the IRS itself (by law, the information had to be redacted from nonprofit tax returns before they were made available to the public), and having it on hand created the possibility that it could leak, either by design or by mistake.
The IRS’s solution was simple – since it does not need the information, it wouldn’t collect it in the first place. Free speech advocates rejoiced. Montana Democrat Sen. Jon Tester wasn’t one of them. On Sept. 24, Tester introduced a resolution of disapproval, which now has 35 co-sponsors – all Democrats.
Because it is a Congressional Review Act resolution of disapproval, it is not subject to filibuster. It only needs 51 votes to pass. That means Senate Democrats only need to find two Republican senators to cross party lines.
As the leader of an organization that was unlawfully targeted by the IRS – and, as a consequence, had donors who came to me in tears, fearful that they were being audited by the IRS as a result of their contributions to our organization – I have some thoughts on this matter:
First, it is a fact that donors to Tea Party groups were 10 times more likely to be personally audited than the average taxpayer.
Second, Congress long ago gave the IRS wide latitude to administer the tax code via regulation. The original requirement to collect the information was an IRS rule, not a law passed by Congress. Now that the IRS has determined it no longer needs the information, and has issued a new rule relieving nonprofits of the burden of filing the information, why should Congress tell the agency otherwise?
Third, we know of at least one case where the IRS had to pay a nonprofit group to settle a lawsuit brought when the IRS divulged private donor information to a left-wing reporter, who then gave the private donor information to a left-wing political organization, which then used the information to harass and intimidate the organization’s donors. Letting the new rule stand in place would mean the IRS would not have the information at hand in the first place, and so could not later leak the information publicly, either by mistake or by design.
Fourth, terminating collection of this information might actually help the IRS restore its reputation, tattered since the Tea Party targeting scandal.
Fifth, it’s ironic that the leader of a group targeted by the IRS now finds herself in the position of pointing out that we recognize that under the Constitution, one of Congress’ most sacred duties is oversight of the executive branch – but in this case, the executive branch agency is self-regulating and reining in its own power, while Senate Democrats are trying to reverse that move, and give an executive branch agency even more power.
Finally, to Senate Democrats pushing to reverse this rule change: Are your memories really so short? In announcing his opposition to the IRS proposal, Tester called it “the swampiest, darkest, dirtiest decision.” Given my own experience, I’d use that description to describe the sustained campaign during the Obama administration – egged on by Senate Democrats – to target conservative non-profits.
The IRS proposal is a belated remedy to curb those abuses. Senate Republicans shouldn’t even think of crossing party lines to join Senate Democrats in restricting our right to freedom of association and freedom of speech.