Donors Should Be Free to Support Charities Without Fear, Group Says

Capital Research Center Applauds Schedule B Proposed Rule Change

December 9, 2019

Internal Revenue Service
(REG-102508-16)
Room 5203
Internal Revenue Service
P.O. Box 7604 Ben Franklin Station
Washington, D.C. 20044

RE: Comments on REG-102508-16: Guidance Under section 6033 Regarding the Reporting Requirements of Exempt Organizations

Dear Sir or Madam:

The Capital Research Center appreciates the opportunity to comment on REG-102508-16: Guidance Under section 6033 Regarding the Reporting Requirements of Exempt Organizations as published in the Federal Register on September 10, 2019.

The Capital Research Center firmly defends the Constitutional right to free speech shared by all Americans. The ability to exercise free speech without fear of public backlash is a bedrock of our Republic. We also believe that donors have the right to support the charitable causes of their choice without fear of the government will reveal their donations being revealed against their wishes.

Unfortunately, it seems some special interests appear are more interested in using the threat of public government disclosure to silence opposing opinions and ideas than in letting everyones ideas them compete on their merits. These special interests often target the sensitive information of an organizations donors with forced government public disclosure.

Congress has sensibly sought to protect this information from forced public disclosure with severe penalties for government employees who unlawfully reveal such information to unauthorized parties. These efforts, however, have sometimes been undermined by state officials who have begun to require tax-exempt organizations (other than 501(c)(3) organizations) to submit an unredacted Schedule B list of donors (the federal Form 990 Schedule B) in order to register in their state.

Despite these officials claims that the Schedule B information will only be used for internal purposes, there have been instances repeated cases whereof this confidential information was being made available to the general public. In one recent case (Americans for Prosperity Foundation v. Harris), it was found that, the State of California published more than 1,700 Schedule B donor lists on its website.

The Capital Research Center believes that the proposed rule eliminating the requirement that tax-exempt organizations provide an unredacted Schedule B list of donors to the IRS would considerably reduce this risk, and bolster the First Amendment right of donors to support the charitable causes of their choice.

We are grateful for the opportunity to provide feedback and express our strong support of the proposed rule change. Thank you for your consideration.

Sincerely,

Scott Walter
President, Capital Research Center

Michael E. Hartmann
Senior Fellow and Director, CRC Center for Strategic Giving

Hayden Ludwig
Investigative Researcher, Capital Research Center