Defending the Right to Donor Privacy
The campaign to safeguard the right to privacy for charitable donors is moving one step closer to reality. Last Friday was the deadline for members of the U.S. House to submit amendments to the Preventing IRS Abuse and Protecting Free Speech Act (H.R. 5053), sponsored by U.S. Rep. Peter Roskam (R-Ill.). The bill would eliminate the requirement that tax-exempt entities disclose the identity of donors to the Internal Revenue Service on a form known as Schedule B. Nonprofit organizations like CEI, although they are not expected to pay taxes on the money they raise, must still file a tax return with the IRS every year known as a Form 990. Since the 1970s, those returns have included “Schedule B” donor lists.
There are a number of reasons why this reform is both a good idea and long overdue. First, individuals who donate to charitable causes in the United States should be afforded the maximum leeway in choosing whether that information is shared with third parties. The government keeping files on which citizens support which political, religious, and charitable organizations is not the mark of a free society. It’s also not necessary for the IRS to do its job of collecting revenue for the Treasury.
Unfortunately, concerns about government agencies misusing information on tax returns for political purposes is not hypothetical. In 2013 conservative activists were understandably up in arms about the political targeting of certain nonprofit groups by the office overseen by the now-infamous IRS official Lois Lerner. The number of groups that the agency targeted for additional scrutiny, originally disclosed as 296, has since been revised up in a release this week to 426.
But our friends on the liberal/progressive side of the political spectrum have just as much reason to be worried. As CEI’s former journalism fellow Jim Bovard has pointed out in the Wall Street Journal, the IRS has been targeting political opponents of whomever happens to be in power since Franklin Roosevelt was in the White House. It won’t surprise anyone that President Nixon, for example, made it a priority to use the IRS to go after “ideological, militant, subversive, radical, and similar type organizations” that opposed administration policy, including civil rights and antiwar groups.
The overreach isn’t just at the federal level, either. Alabama officials attempted to silence the NAACP in the 1950s by forcing them to disclose their donor and membership lists. The NAACP refused and the case made its way to the Supreme Court. In a unanimous decision, the court ruled against the state government in NAACP v. Alabama (1958). In his opinion Justice John Harlan wrote, “Immunity from state scrutiny of petitioner’s membership lists is here so related to the right of petitioner's members to pursue their lawful private interests privately and to associate freely with others in doing so as to come within the protection of the Fourteenth Amendment”.
CEI, of course, has as big a dog in this fight as anyone. We’ve already been the target of a legal abuse of power this year that demanded we turn over confidential files, including donor-related information, to government officials. That legal fight, which is still ongoing, is part of a campaign by state and territorial attorneys general rather than the IRS, but the intent is the same. Politically motivated government officials want to force organizations that they disagree with to disclose confidential information, with the hope that those disclosures will make their work more difficult. It was wrong when Nixon did it to antiwar activists and it is wrong now.
Rep. Roskam’s bill can limit the ability of the IRS to target nonprofit groups and harass their supporters, and we hope, when passed, it will do just that. As CEI president Kent Lassman said earlier this year, “No one should be singled out by their government and punished for their personal beliefs. Rep. Roskam’s Preventing IRS Abuse and Protecting Free Speech Act is a step toward protecting Americans’ rights of free speech and association.”
