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Victory for Nonprofit Donor Privacy

On July 16, 2018, the Treasury Department and Internal Revenue Service announced that most tax-exempt organizations, including 501(c)(4) social welfare organizations, will no longer be required to report donor names and addresses on Schedule B of Form 990.  Previously, nonprofits were required to provide these details for all contributions over $5,000 (although donor names were generally not available for public review).  The IRS's revenue procedure does not affect groups organized under 501(c)(3) or section 527, which will still be required to report donor information.

Nonprofits relieved of this reporting burden are still required to collect and retain this information in their books and records and to provide it to the IRS upon request.  The revised reporting requirements apply to tax returns ending on or after December 31, 2018.

The Treasury Department provided several reasons for its decision.  First, it said the IRS does not generally need the donor information provided on Schedule B.  Second, the IRS's new policy will protect donors by reducing the risk that the IRS accidentally discloses or misuses confidential information (the IRS has inadvertently disclosed confidential donor information in the past).  The Treasury department also noted that conservative groups were disproportionately impacted by improper screening in the past, and stated that ending the collection of sensitive donor information will reinforce the reforms that the IRS already implemented after the political targeting scandal and increase the public's trust in the IRS.  Third, the Treasury Department said that the IRS's new policy will save both private and government resources, by eliminating needless paperwork and relieving the IRS of the need to devote resources to redacting donor names and addresses before it makes organizations' Schedule B forms public.  

The IRS Revenue Procedure with the new policy is located here: 


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