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December 14, 2015

Senator Aims to Block IRS Proposal on Optional Donor Data

Senator Pat Roberts has introduced legislation to block a planned Internal Revenue Service regulation to allow charities to submit contributors' Social Security numbers to substantiate donations for tax purposes, Accounting Today reports. The Kansas Republican said the IRS could not be trusted to safeguard donors' personal information and might later make the optional provision of such data mandatory.

The IRS proposed the change in September as a way to avert disputes with taxpayers who claim deductions on gifts of more than $250 but do not provide the traditional written receipt from the recipient charity. Under the new rule, donors could claim the break if the nonprofit voluntarily submits paperwork to the IRS with details about the gift, including the contributor's Social Security number.

The tax agency said the proposal has been misrepresented and "would impose no mandatory changes to existing rules on how charities substantiate donations for donors." Some charity regulators and industry groups also oppose the change, arguing that it would open the door to fundraising scams and identity theft.