Updated Action Alert: IRS Reporting Proposal Threatens Donor, Nonprofit Security

December 7, 2015

By Henry Bogdan, Director of Advocacy & Public Policy, Maryland Nonprofits

Please join Maryland Nonprofits, the National Council of Nonprofits and many others in saying “NO” to a new regulation proposed by the IRS.

The Internal Revenue Service advises taxpayers on its website and on a YouTube video to only give out their Social Security numbers (SSN) when “absolutely necessary.” Despite

this
the IRS is proposing a rule that would encourage nonprofits to ask donors for their SSNs and report them along with

the amount of
donations to the IRS. It is not hard to imagine

that scam artists
, posing as nonprofits, will soon be calling people asking for their private Social Security numbers.

The proposed regulations would give nonprofits the option of filing a separate new information return with the IRS and individual donors by February 28 every year to substantiate contributions of more than $250 in value. A similar mandatory proposal was considered and rejected in the past based on numerous legal, policy, and confidentiality problems it raised.

Most nonprofits believe that “never” is the better answer; as in a charitable nonprofit should never be asking a donor for her or his Social Security number when soliciting donations. If someone is asking for an SSN in relation to a donation, that should be considered a sign of a scam or fraudulent solicitation.

The IRS is accepting public comments on the proposal through December 16 – in this situation the more responses from individual charities the stronger our voices will be.

See The National Council of Nonprofits page on submitting comments, or you can go directly to Regulations. Gov to comment on the proposed regulation

Learn more about the proposed regulations, read an analysis by the National Council of Nonprofits, and find out what you can do to take action against it on behalf of donors, nonprofits, and the public.