Faith Group Advocates Elimination of Donor Disclosure Requirement

U.S. Department of the Treasury
CC:PA:LPD:PR (REG-102508-16)
Room 5203, Internal Revenue Service
P.O. Box 7604, Ben Franklin Station
Washington, D.C. 20044

Re: Guidance under Section 6033 Regarding the Reporting Requirements of Exempt Organizations, 84 Fed. Reg. 47447 (Sept. 10, 2019) (RIN 1545-BN28)

To Whom it May Concern:

Alliance Defending Freedom (ADF) submits the following comments on the Notice of Proposed Rulemaking (NPRM) regarding current guidance under Section 6033 of the Internal Revenue Code (Code). ADF enthusiastically supports the Internal Revenue Service's (IRS) proposal to eliminate the current guidance mandating that tax-exempt organizations (except those in Sections 501(c)(3) or 527 of the Code) disclose private donor information from Schedule B of Forms 990 and 990-EZ.¹

ADF is an alliance-building legal organization that advocates for the right of people to freely speak and live out their faith. It pursues its mission through litigation, training, strategy, and funding. Since its launch in 1994, ADF has handled countless matters involving the free speech and association principles addressed by the Notice of Proposed Rulemaking. It has represented and advised organizations and private persons whose rights to free speech and association have been violated, including people without the means to defend themselves against the types of vicious doxing attacks the IRS's proposal guards against.

Among many other things, ADF recently submitted a Petition for Writ of Certiorari to the U.S. Supreme Court in Thomas More Law Ctr. v. Becerra, arguing that California's requirement that organizations include Schedule B forms in their registration filings was an unconstitutional violation of donor privacy, a violation which has created “an imminent danger of hate mail, violence, ostracization, and boycotts.”²

Accordingly, ADF respectfully submits that it is well-qualified to comment on the NPRM.

ADF commends the IRS for crafting a proposed rule that upholds the right to free speech and association while eliminating a requirement with dangerous implications for donor privacy. Our comments focus on two points: (1) the IRS's authority to adopt the rule in question, and (2) the problems the proposal seeks to address.

A. The IRS Has Authority To Adopt The Proposed Rule.

Congress has mandated that tax-exempt organizations (including non-profits) file certain basic information with the IRS: “gross income, receipts, and disbursements,” and “such other information . . . as the Secretary” of the IRS may “prescribe” for tax administration purposes.³ While Congress has also mandated that some other organizations provide additional information, the only organizations that must do so are 501(c)(3) charitable organizations.⁴ Furthermore, Congress has given the IRS the explicit authority to “relieve any organization from filing . . . a return” when the Secretary “determines that such filing is not necessary to the efficient administration of the internal revenue laws.”⁵ Therefore, because Congress has only mandated that non-profits file basic information, and because the Secretary has the authority to both impose additional requirements and remove those requirements, the IRS has the authority to promulgate the proposed rule.

B. The Proposed Rule Is Necessary To Address Donor Privacy And Constitutional Concerns

a. Donor Privacy

At every level, tax information collection regimes jeopardize donor privacy. Unfortunately, when organizations put donors' personal information on tax forms such as Schedule B's, that information is often leaked to third parties, intentionally or unintentionally.⁶ For instance, in ADF's Thomas More Law Ctr. v. Becerra and its companion case, it was revealed that the Attorney General's office had accidentally posted “all the names and addresses of hundreds of donors” for numerous organizations, including Planned Parenthood.⁷ The judge described “the amount of careless mistakes made” as “shocking.”⁸

This is far from the only example; indeed, unintentional disclosure is commonplace. The Treasury Inspector General for Tax Administration reports that every year, donor information is accidentally made public.⁹ Possibly because “many IRS employees have not taken mandatory privacy awareness training,”¹⁰ IRS officials often inadvertently reveal donor information. For example, during the 2012 presidential campaign, an IRS staffer “forgot to redact the names and addresses of [the National Organization for Marriage's] donors [from NOM's Schedule B] before sending it out to an individual.”¹¹

Disturbingly, although private information does often leak unintentionally, people will also sometimes leak it intentionally, a practice known as doxing.¹² For example, an aide to two Democratic senators released “personal information such as home addresses” for five Republican senators, “posting their personal contact information on Wikipedia.”¹³ Similarly, for several years an anonymous Twitter account would daily post “names, hometowns, occupations and employers of people who contributed as little as $200 to [then-candidate] Trump's [presidential] campaign.”¹⁴ Even states dox people: a recent investigation found California has been selling citizens' personal information for years, raking in almost $300 million over the past six years, including over $51 million in 2018 alone.¹⁵

These leaks have devastating effects. Those ideologically opposed to certain organizations will do everything possible to use leaked donor information to attack those donors and organizational supporters. These supporters face extraordinary harassment, “ranging from threats to kill or maim to boycotts, firings, and public shaming.”¹⁶ For example, after the IRS's leak of NOM's donors during the 2012 presidential campaign, a leftist advocacy group accused those donors of “beyond despicable” actions, including supporting “racially divisive tactics.”¹⁷ Similarly, a congressman tweeted out a list of people who had donated to President Trump's campaign, listing their full names and employers and accusing them of “fueling a campaign of hate.”¹⁸ Attackers then sent expletive-laced rants to these donors, threatening to “post [their] number[s] and extension[s] all over the Internet.”¹⁹ These attackers and their ilk are often liberal with their choice of targets: another group, known for “actively making death threats and threats of violence,” threatened to post personal information for 18-year-old college freshmen who joined conservative student groups.²⁰

In the most extreme situations, terrorists have used publicly disclosed information such as addresses to physically attack organizations and their supporters or threaten to attack them. While working in the headquarters for Americans for Prosperity (AFP), a contractor “posted online that he was 'inside the belly of the beast' and that he could easily walk into [an AFP staffer's] office and slit his throat.”²¹ In another chilling example, after the Southern Poverty Law Center (SPLC) labelled the Family Research Council (FRC), a non-profit think tank,²² as a so-called “hate group” and listed their address online in a “hate map,”²³ a terrorist walked into FRC headquarters and opened fire, intending to kill as many people as possible because of their politics.²⁴

b. Constitutional Concerns

These and other attacks come in a political climate that is increasingly hostile to opposing views. Often, rather than engaging in discourse and debate, people on opposite sides of the aisle hurl insults, resorting to accusations of racism, sexism, or worse with no evidence, just to discredit opponents. While organizations may have the funds to hire lawyers to fight these accusations, most individual citizens do not. These people should not be intimidated into silence for fear they will be fired, harassed, or even jailed.²⁵

This climate raises grave constitutional concerns about our freedoms of speech and association. These freedoms are two of our oldest and most fundamental Constitutional rights.²⁶ But these freedoms are under attack across the country, as states and state officials try to force groups to disclose Schedule B's with their donors' private information, opening up these donors to online and physical attacks, and chilling free speech and association.

Courts have recognized these constitutional concerns, specifically those surrounding current tax information collection schemes. For example, New York enacted statutes requiring 501(c)(3) organizations to identify all donors who had given more than $2,500, while similar requirements would have forced 501(c)(4) organizations to identify all donors who gave more than $1,000.²⁷ A federal district court held both reporting provisions unconstitutional.²⁸ The court noted that “[t]here is no question that public disclosure of donor identities burdens the First Amendment rights to free speech and free association.”²⁹ The court reasoned that because “[t]here is no substantial relation between the requirement that the identity of donors to 501(c)(3)s be publicly disclosed and any important government interest” and because “a 'substantial number' of the applications of [both statutes] [was] likely to result in interference with the rights to freely associate and speak,” New York could not mandate disclosure of these donors' identity.³⁰

Similarly, New Jersey enacted a law “requiring disclosure of the identity of donors contributing more than $10,000 by groups engaging solely in issue advocacy.”³¹ A federal district court granted a preliminary injunction barring enforcement of the law.³² The court noted “a climate marked by the so-called cancel or call-out culture,” marked by “people losing employment, being ejected or driven out of restaurants while eating their meals,” a culture “where the Internet removes any geographic barriers to cyber harassment of others.”³³

Finally, as discussed, ADF is currently challenging a decision by the California Attorney General to recently begin requiring organizations fundraising in California (including AFP) to include Schedule B's when submitting Form 990's to the state, although Schedule B's had been omitted for years to protect donor privacy.³⁴ After a bench trial in which “the [c]ourt heard ample evidence establishing that AFP, its employees, supporters and donors face public threats, harassment, intimidation, and retaliation once their support for and affiliation with the organization becomes publicly known,” the court granted AFP's motion for a permanent injunction against the California Attorney General. On appeal, although admitting that California “ha[d] not maintained Schedule B information as securely as it should have,”³⁵ the Ninth Circuit Court of Appeals still reversed the trial court.³⁶ ADF's cert petition is pending.³⁷

In sum, the danger of inadvertent — or worse, intentional — disclosure of the information contained in Schedule B's far outweighs any benefit gained in the collection of donor information, and the proposed changes properly value the freedom of speech and privacy in association.

ADF unequivocally supports this proposed rule.

Respectfully submitted,

Zackary C. Pruitt
Senior Counsel
Alliance Defending Freedom