Senate Finance ranking member Ron Wyden (D-OR) and Sen. Bob Casey (D-PA) sent a letter to IRS Commissioner Charles Rettig this week seeking more information about the agency’s decision last year to scrap donor disclosure rules for certain tax-exempt organizations.
Among other things, Wyden and Casey want to know why the IRS’s Criminal Investigations office wasn’t consulted before the policy change. As the office has jurisdiction to investigate illegal political contributions from foreign sources and other violations, “it would follow that IRS CI would have been consulted and apprised of this consequential change in disclosure requirements prior to its imposition,” Wyden and Casey said. “However, such a consultation did not take place.”
The IRS and Treasury Department announced last July that the administration no longer needed to collect donor information from business associations, labor unions and 501(c)(4) “social welfare” groups. Previously, tax-exempt organizations had to identify donors of $5,000 or more on their Form 990 returns.
Wyden and other congressional Democrats questioned the policy change at the time, and Wyden nearly held up Rettig’s confirmation at the IRS unless he pledged to reverse the disclosure rule. Wyden continues to argue that being able to see who donates to certain tax-exempt organizations – particularly those engaged in political activities – helps taxpayers and lawmakers understand who is trying to influence elections.
Soon after the change, Montana Gov. Steve Bullock sued the IRS and the Treasury Department for changing the donor disclosure requirement without public input and hindering states’ efforts to oversee the tax-exempt sector. Earlier this year, the attorneys general offices in New York and New Jersey filed suit seeking public records on how the new policy came about.
In their letter to Rettig this week, Wyden and Casey gave Rettig until July 24 to respond to a series of questions about who initiated the policy change and whether it might hamper investigations.