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Some nonprofits will no longer need to identify their donors to the IRS

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Some nonprofit groups will no longer have to give the IRS the names of donors who give them $5,000 or more.

Among the groups that will no longer have to report donors are the National Rifle Association, various chambers of commerce, and groups focused on particular issues, such as Americans for Prosperity, which has been closely associated with the Koch brothers. But the ruling also applies to groups like the NAACP, labor unions, and volunteer fire departments.

It was a long-sought goal of some of those groups — particularly on the right.

The Treasury Department, which announced the rule change late Monday, said that information was never subject to public disclosure. Although the tax returns of nonprofit groups are public record, the information on donors’ names had to be redacted before their release.

Senior Treasury officials said that donor lists have inadvertently been released in the past, and groups on both the left and the right had worried that people would be reluctant to make donations if they were worried their names would become public.

“Many groups with diverse beliefs have this concern,” said a senior Treasury official briefing reporters on the change early Tuesday.

The Republican-controlled House in 2016 passed the Preventing IRS Abuse and Protecting Free Speech Act, though the Senate never voted on it. The bill would have eliminated the confidential donor form.

Nonprofit groups that receive tax-deductible donations, such as charities, will still have to report the names of their larger donors. That information is useful to the IRS in making sure that taxpayers are not reporting bogus contributions. But the IRS said it was not doing anything with the name of donors to other nonprofits.

“Americans shouldn’t be required to send the IRS information that it doesn’t need to effectively enforce our tax laws, and the IRS simply does not need tax returns with donor names and addresses to do its job in this area,” said Treasury Secretary Steven Mnuchin.

Critics say the rules could make it easier for politically active nonprofits to conceal foreign contributions, which are not allowed under election laws.

“The IRS is already a toothless watchdog when it comes to overseeing nonprofits,” said Robert Maguire, political nonprofit investigator for the Center for Responsive Politics. “But it should have donor information that it can use to effectively oversee the political activity of these groups.”

Maguire said this rule change allows “dark money” to flex its political muscle through anonymous donations.

“It’s a boon to anyone who wants to spend large amounts of money on politics without any accountability,” he said.

The NRA did not respond to a request for comment on the new rules. But the US Chamber applauded the change.

“This action will help ensure that sensitive donor information will not fall into the hands of those who wish to suppress the First Amendment right to free speech,” said Blair Holmes, a spokesperson for the chamber.

The IRS rules had been in place since 1971.

The nonprofit groups will have to maintain a record of their donors so the IRS can check in case of an audit. Treasury officials said not reporting donors names will reduce the cost of tax filings by the groups, and it will reduce the IRS costs because the agency no longer has to redact the information before the forms are released.

Chris Isidore, CNN