Here’s One Simple Trick for Protecting Nonprofits and Their Donors

By Matt Miller
May 15, 2018

Today, the Goldwater Institute joined more than 60 nonprofit organizations in urging President Trump and Treasury Secretary Steve Mnuchin to protect the First Amendment rights of charitable donors by taking a simple step: Begin rulemaking to eliminate a tax form, known as Schedule B, of the Form 990 that charities are required to file with the IRS. This “Schedule of Contributors” requires charities to report to the IRS the names and addresses of individuals giving more than $5,000 in a calendar year.

While the IRS arguably has some interest in knowing whether people who claim to be giving to charity have actually given the money, Schedule B has, in reality, become a vehicle for harassment and intimidation of nonprofit donors.

As the letter explains:

[R]ecent years have witnessed an increase in assaults against First Amendment free speech and association rights. In numerous instances, the IRS has collected and leaked sensitive identifiable information regarding contributors to 501(c) organizations contained in the IRS ‘Schedule B’ form that is supposed to remain confidential. Moreover, the Schedule B form and confidential donor information contained therein have been demanded and used by other government officials, specifically hyper-partisan state attorneys general, to harass and intimidate organizations and individual donors that do not share their ideological and political beliefs. 

Despite these problems, is Schedule B worth keeping around due to the information it provides the IRS?  No, says the letter. “The IRS itself has acknowledged that Schedule B information is irrelevant to the legally permissible handling of tax filings by 501(c) organizations.”

President Trump and Secretary Mnuchin can protect America’s nonprofit community—immediately—by taking action on Schedule B, and there is no reason not to do so. A full copy of the letter can be found here.

Matt Miller is a senior attorney at the Goldwater Institute.