Goodwill Requests Guidance on Donee Reporting Requirements

Goodwill is committed to helping workers move toward family-sustaining careers. To advance this mission, 158 autonomous community-based Goodwill agencies around the country operate over 3,000 stores and other social enterprises that create jobs, paid job training, career services and other services for people with disabilities and disadvantages. To fund its community-based social services, Goodwill sells donated goods in stores and on an online auction site, www.shopgoodwill.org. As a leading social enterprise, Goodwill creates an average of 25 jobs per donated goods store, generates revenue to fund mission services, and employs sustainable principles to keep usable items out of landfills. Forbes has repeatedly named Goodwill to its list of America's Most Inspiring Companies.

Donors are vital to Goodwill's ability to fulfill our mission. Last year, Goodwill earned the trust of 84 million donors. While most of our donations are clothing or household goods, Goodwills collectively received a significant number of individual gifts and endowments. Current rules require an individual donating an item worth $250 to $5,000 to obtain written acknowledgment from the charity (more detailed than a receipt) that meets IRS guidelines. This is a rarity for our agencies. IRS Form 8283 must be completed by a donor if the item is valued at more than $5,000 and has an appraisal form to accompany it. Local Goodwill leaders must witness the donation to sign this form.

Optional Reporting

Though these situations are rare, GII believes the potential burden and costs associated with donee reporting as outlined in the proposed rule. We appreciate that the Treasury Department and the Internal Revenue Service (IRS) seek to minimize the burden on the donees and that proposed regulations stipulate that donee reporting is not required but is rather at the option of the donee organization. GII strongly encourages that final rules provide that any such reporting be optional and at the discretion of the donee organization.

We believe the responsibility of donation valuation is appropriately placed on the donor. Donors can seek guidance from our valuation guide, their tax software or from the appropriate acknowledgment forms or appraisals. Goodwill harnesses the power of used goods to help millions of people each year achieve their full potential through learning and the power of work. When someone drops off their noncash donation at Goodwill, our mission begins. Donation receipts are available to every donor that visits one of our attended donation centers. The majority of the millions of clothing and household goods donors receive a receipt for their records. Goodwill agencies do not track if the donor uses the receipt or assign value to the donation.

Data Security Concerns

The proposed rule notes that donee reporting must include certain information including the donor's name, address, and taxpayer identification number. GII shares the concern about the risk of identity theft raised by the Treasury Department and the IRS. The Bureau of Justice Statistics has reported that 17.6 million U.S. residents experienced identify theft in 2014¹. There is no easy remedy. According to the proposed rules, the donee organization would be responsible for collecting, storing, and transmitting donee reporting information. It would be very expensive for nonprofits to create new infrastructure or technological systems to securely store this information. This type of system does not currently exist at many nonprofits. GII strongly suggests the Treasury Department and IRS provide technical guidance to donee organizations on the collection and storing of personal information.

Local Goodwill agencies are part of a diverse charitable and philanthropic community of over 1.2 million organizations working every day to provide services that benefit individuals, families and communities across America. As nonprofit organizations like Goodwill meet increased demand for services while receiving less state and federal support, the Administration should not require charitable organizations to divert resources from advancing their missions in order to comply with costly regulations.

On behalf of Goodwill Industries International and its network of 158 community-based Goodwill agencies in the United States, thank you for the opportunity to comment on the proposed rulemaking. Should you have any questions pertaining to Goodwill Industries' comments, please contact me at jim.gibbons@goodwill.org or 240-333-5202 or Laura Walling, GII Director of Advocacy and Legislative Affairs, at laura.walling@goodwill.org or 240-333-5378.