Lawmakers Urge Treasury, IRS to Reinstate Donor Disclosure Rule

May 26, 2021

The Honorable Janet Yellen
Secretary
U.S. Department of the Treasury
1500 Pennsylvania Avenue N.W.
Washington, D.C. 20530

The Honorable Charles P. Rettig
Commissioner
Internal Revenue Service
1111 Constitution Avenue NW
Washington, DC 20224

Dear Secretary Yellen and Commissioner Rettig:

We write to urge the Treasury Department and Internal Revenue Service (IRS) to reverse the Trump Administration's decision to eliminate disclosure requirements for certain tax-exempt organizations that engage in political activity. As it stands, this policy weakens federal tax laws, campaign finance laws, and longstanding efforts to prevent foreign interference in U.S. elections.

For decades, the Treasury Department and IRS required 501(c)(4) organizations and other tax-exempt groups that are eligible to engage in political advocacy to identify, in confidential filings, the names and addresses of individual donors who make significant financial contributions over $5,000. In 2018, the IRS attempted to unilaterally eliminate this requirement. That same year, the Senate voted in a bipartisan manner to overrule the IRS's action, and the rule was eventually struck down by a Federal court. Despite the Senate vote and Federal court ruling, in May of last year the Treasury Department and IRS finalized a regulation eliminating this longstanding disclosure requirement, allowing 501(c)(4), 501(c)(5) and 501(c)(6) groups engaged in political activity to hide the identities of major donors from the IRS.

Eliminating the requirement that tax-exempt groups disclose basic information about the source of their contributions undercuts efforts to enforce prohibitions against foreign spending in U.S. elections and detect other illegal activity. It also undermines the ability of the U.S. government to police the wave of “dark money” that has flooded our political system in the decade since the Supreme Court's decision in Citizens United v. Federal Elections Commission. According to a study by the nonpartisan Center for Responsive Politics, dark money groups have spent over $1 billion to influence U.S. elections since 2008.

As secret campaign contributions continue to pour into federal elections, this IRS rule is a major step backwards for transparency and will allow dark money to continue to corrode our political system. The IRS needs every tool at its disposal to ensure that these organizations are complying with the law.

Reinstating this rule is a critical step in preventing special interests and foreign actors from exploiting loopholes at the expense of the American people. We strongly urge you to reconsider the prior administration's decision and reinstate the requirement that certain tax-exempt organizations engaged in political activity disclose information about their major donors to the IRS.

Sincerely,

Ted Deutch
MEMBER OF CONGRESS

Peter Welch
MEMBER OF CONGRESS

David N. Cicilline
MEMBER OF CONGRESS

Jason Crow
MEMBER OF CONGRESS

Mark DeSaulnier
MEMBER OF CONGRESS

Kaialiʻi Kahele
MEMBER OF CONGRESS

Barbara Lee
MEMBER OF CONGRESS

Eleanor Holmes Norton
MEMBER OF CONGRESS

Derek Kilmer
MEMBER OF CONGRESS

David E. Price
MEMBER OF CONGRESS

Juan Vargas
MEMBER OF CONGRESS

Earl Blumenauer
MEMBER OF CONGRESS

Salud O. Carbajal
MEMBER OF CONGRESS

Ed Case
MEMBER OF CONGRESS

Gerald E. Connolly
MEMBER OF CONGRESS

Peter A. DeFazio
MEMBER OF CONGRESS

James Himes
MEMBER OF CONGRESS

Pramila Jayapal
MEMBER OF CONGRESS

Ro Khanna
MEMBER OF CONGRESS

Tom Malinowski
MEMBER OF CONGRESS

James P. McGovern
MEMBER OF CONGRESS

Chris Papas
MEMBER OF CONGRESS

Dean Phillips
MEMBER OF CONGRESS

Mike Quigley
MEMBER OF CONGRESS

Jamie Raskin
MEMBER OF CONGRESS

John Sarbanes
MEMBER OF CONGRESS

Mary Gay Scanlon
MEMBER OF CONGRESS

Jan Schakowsky
MEMBER OF CONGRESS

Frederica S. Wilson
MEMBER OF CONGRESS

John Yarmuth
MEMBER OF CONGRESS

Jim Cooper
MEMBER OF CONGRESS

Teresa Leger Fernández
MEMBER OF CONGRESS