Donor reporting requirement eliminated for these tax-exempt groups

The Internal Revenue Service (IRS) will no longer collect the personally identifiable information of donors to certain tax-exempt organizations, as it seeks to both reduce burdensome requirements for those groups and protect taxpayer privacy.

The organizations that will no longer need to file detailed information about their donors – like names and addresses –  as part of their annual return include groups such as labor unions, volunteer fire departments, local chambers of commerce and veterans groups, among others. These groups generally do not receive tax deductible contributions.

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“Americans shouldn’t be required to send the IRS information that it doesn’t need to effectively enforce our tax laws, and the IRS simply does not need tax returns with donor names and addresses to do its job in this area,” Treasury Secretary Steven Mnuchin said in a statement, adding that the changes will not reduce transparency.

The action will not affect reporting requirements for charities that receive tax-deductible contributions or political organizations, which will continue to report the information in order to allow the IRS to confirm contributions for donors that claim charitable contributions.

For the other organizations, however, there is no need for the information to be publicly disclosed, according to the Treasury, which added that the IRS has accidentally released such information in the past. The IRS will still require groups like labor unions and local fire departments to collect the names and addresses of its donors so that it can access such data if necessary.

The Treasury said that the move will eliminate time and wasted resources on both the part of the taxpayer and the IRS.

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