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On Monday, the IRS and the Treasury Department announced that they would no longer require most tax-exempt organizations to report the names and addresses of their donors. Under prior revenue procedures, tax-exempt organizations were generally required to report the names and addresses of all persons that contributed $5,000 or more in a year. Now, organizations exempt from federal tax under § 501(a) of the Internal Revenue Code, other than organizations governed by § 501(c)3, will not be required to affirmatively report that information. However, they will still be required to maintain that information in their books and records to allow the IRS “to administer the internal revenue laws through examination of specific taxpayers.”

Impacted organizations include civic organizations qualifying under Section 501(c)4, which are allowed to engage in an unlimited amount of lobbying efforts. This could reduce the reporting burden on those entities and will reduce the number of government employees with access to donor names and addresses. The new revenue procedure will also impact reporting policies for social clubs, fraternal beneficiary societies, and domestic fraternal organizations. It will apply to informational returns due on or after May 15, 2019. The procedure states that the prior reporting requirement:

  • Increased compliance costs;
  • Consumed IRS resources as a result of redaction requirements; and
  • Posed a risk of inadvertent disclosure of private information.

In setting forth the new procedure, the IRS emphasized that, because names and addresses of donors had not previously been subject to disclosure, the procedure would have no impact on what information is currently available for public inspection.