IRS Drops Idea for Non-Profits to Report Donor SSNs

Last month, we told you about how the IRS had proposed to give non-profit organizations the option to collect and report the Social Security Numbers (SSNs) of their donors. This proposal has now been taken off the table.

The rule, which the IRS and the Treasury Department had originally proposed in the fall of 2015, gave charitable non-profits the option of asking their donors for additional personal information. Among this information would have been the donor’s Social Security Number. The option to ask a donor for his or her SSN would have only existed for those who make donations of at least $250.

Many charities expressed their concern about this proposed option, even though the non-profit would have had the choice of whether to collect such personal information. The National Council of Non-profits called on many of these organizations to send in their comments in opposition of the idea. As of late last week, close to 38,000 comments had been received by the federal tax collection agency, and most opinions were against it.

Sen. Pat Roberts, a Republican from Kansas, introduced legislation in December designed to block this proposed regulation for non-profits. Roberts was satisfied that the IRS decided to move on from the idea.
“I am pleased the IRS has listened to reason and has scrapped this plan,” Roberts said in a statement. “The rule would have had a chilling effect on charitable giving and would have added a costly burden to charitable organizations.”
The federal government released a statement about its decision to withdraw its proposal.
“The proposed framework for donee reporting was intended to minimize the reporting burden on donee organizations by making it voluntary, and to protect donor privacy by not using the Form 990 series,” the statement said. “The Treasury Department and the IRS received a substantial number of public comments in response to the notice of proposed rulemaking. Many of these public comments questioned the need for donee reporting, and many comments expressed significant concerns about donee organizations collecting and maintaining Taxpayer Identification Numbers for purposes of the specific-use information return. In response to those comments, the Treasury Department and the IRS have decided against implementing the statutory exception to the CWA requirement, and therefore that exception remains unavailable unless and until final regulations are issued prescribing the method for donee reporting.”
Tim Delaney, president and CEO of the National Council of Non-profits, expressed his concern that the proposed rule might give identity thieves another avenue to obtain personal information from donees.

“Non-profits have neither the financial resources nor sufficient staffing to combat hackers who will see an easy source for Social Security information,” Delaney wrote in a statement. “This also creates a liability nightmare for innocent non-profits…To be asked to share their address, their credit card number and their Social Security Number all in the same place would be enough to scare even the most committed donor to decline to give.”

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