The Nonprofit Sector Wins a Battle with the IRS!

The US Internal Revenue Service delivered some good news to start the new year. The IRS has withdrawn its controversial proposed regulation that would have encouraged charities to acquire, record, and report the Social Security numbers of all donors who give $250 or more in any given calendar year.

High Five by Allie Kenny via FlickrIn a post (“Warning: The IRS Wants You to Do Something Dangerous”) last month, I outlined some of my problems with the IRS proposal, and joined with others to call on individuals and organizations to share their comments with the IRS.

Nearly 38,000 official comments opposing the proposal were submitted to the IRS, according to The Chronicle of Philanthropy. Interestingly, both charities and charity regulators expressed serious concerns about the proposal.

In the notice of withdraw, Karen Schiller, IRS Acting Deputy Commissioner for Services and Enforcement, wrote:

Many of these public comments questioned the need for donee reporting, and many comments expressed significant concerns about donee organizations collecting and maintaining taxpayer identification numbers [including Social Security numbers] …. Accordingly, the notice of proposed rulemaking is being withdrawn.”

The news from the IRS is certainly good. On the surface, it’s great that the agency has withdrawn a potentially dangerous proposed regulation that could have led to identity theft, decreased philanthropy, and other problems. But, there is more good news in this story.

This story demonstrates that the nonprofit sector has the power to influence government. This success coupled with the year-end legislative victory securing the IRA Charitable Rollover and other giving incentives also demonstrates what the nonprofit sector can accomplish when we join together and take action.

I thank everyone who commented on the IRS proposal and who advocated Congress for the charitable giving incentives. We should all take a moment to celebrate the nonprofit sector’s recent public policy successes.

Next, we as a sector must create a public policy agenda that advances philanthropy, and get back to work to advocate for that agenda. We’ve already shown we can accomplish great things when we make the effort. With much more needing to be done, we must continue to act.

What key issues do you think should be top priorities on the nonprofit sector’s government relations agenda?

That’s what Michael Rosen says… What do you say?

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