Free speech, even unpopular speech, is a basic freedom that is supposed to be enjoyed by all Americans. Yesterday, that freedom became just a little bit more secure.
The Treasury Department and IRS announced today that the IRS will no longer require certain tax-exempt organizations to file personally-identifiable information about their donors as part of their annual return. The revenue procedure released today does not affect the statutory reporting requirements that apply to tax-exempt groups organized under section 501(c)(3) or section 527, but it relieves other tax-exempt organizations of an unnecessary reporting requirement that was previously added by the IRS.
Nearly fifty years ago, Congress directed the IRS to collect donor information from charities that accept tax-deductible contributions. That statutory requirement applies to the majority of tax-exempt organizations, known as section 501(c)(3) organizations, receiving contributions that can be claimed by donors as charitable deductions. This policy provided the IRS information that could be used to confirm contributions to those organizations.
By regulation, however, the IRS extended the donor reporting requirement to all other tax-exempt organizations—labor unions and volunteer fire departments, issue-advocacy groups and local chambers of commerce, veterans groups and community service clubs. These groups do not generally receive tax deductible contributions, yet they have been required to list the names and addresses of their donors on Schedule B of their annual returns (Form 990).
“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,” said U.S. Treasury Secretary Steven T. Mnuchin. “It is important to emphasize that this change will in no way limit transparency. The same information about tax-exempt organizations that was previously available to the public will continue to be available, while private taxpayer information will be better protected. The IRS’s new policy for certain tax-exempt organizations will make our tax system simpler and less susceptible to abuse.”
This is very typical of what has happened as the administrative state was allowed to mainline PCP-and-testosterone by a supine Congress and complicit judiciary. A perfectly sensible law that required organizations qualified to receive tax exempt contributions disclose their donors so the IRS could, if needed, cross reference claimed income tax deductions with actual donations received. The IRS, naturally, extended the law by use of the rule making process to all non-profits, even those who don’t qualify as tax deductible. What makes this data collection so meaningless is that the Supreme Court has said that government cannot demand membership lists. This from NAACP vs. Alabama when Alabama demanded the NAACP open its membership list to inspection:
It is hardly a novel perception that compelled disclosure of affiliation with groups engaged in advocacy may constitute as effective a restraint on freedom of association as the forms of governmental action in the cases above were thought likely to produce upon the particular constitutional rights there involved. This Court has recognized the vital relationship between freedom to associate and privacy in one’s associations. When referring to the varied forms of governmental action which might interfere with freedom of assembly, it said in American Communications Ass’n v. Douds, supra, 339 U.S. at page 402, 70 S.Ct. at page 686: ‘A requirement that adherents of particular religious faiths or political parties wear identifying arm-bands, for example, is obviously of this nature.’ Compelled disclosure of membership in an organization engaged in advocacy of particular beliefs is of the same order. Inviolability of privacy in group association may in many circumstances be indispensable to preservation of freedom of association, particularly where a group espouses dissident beliefs. Cf. United States v. Rumely, supra, 345 U.S. at pages 56 58, 73 S.Ct. at pages 550–551 (concurring opinion).
We think that the production order, in the respects here drawn in question, must be regarded as entailing the likelihood of a substantial restraint upon the exercise by petitioner’s members of their right to freedom of association. Petitioner has made an uncontroverted showing that on past occasions revelation of the identity of its rank-and-file members has exposed these members to economic reprisal, loss of employment, threat of physical coercion, and other manifestations of public hostility. Under these circumstances, we think it apparent that compelled disclosure of petitioner’s Alabama membership is likely to affect adversely the ability of petitioner and its members to pursue their collective effort to foster beliefs which they admittedly have the right to advocate, in that it may induce members to withdraw from the Association and dissuade others from joining it because of fear of exposure of their beliefs shown through their associations and of the consequences of this exposure.
It is not sufficient to answer, as the State does here, that whatever repressive effect compulsory disclosure of names of petitioner’s members may have upon participation by Alabama citizens in petitioner’s activities follows not from state action but from private community pressures. The crucial factor is the interplay of governmental and private action, for it is only after the initial exertion of state power represented by the production order that private action takes hold.
Of course, once the State is in possession of the membership list, the membership becomes public.
In March 2012, an unnamed Obama administration employee turned sensitive tax documents from NOM – including its full donor list – over to the Human Rights Campaign, a homosexual activist group. The president of HRC, John Solmonese, went on to be a national co-chair of Obama’s 2012 campaign. From there, the documents were printed on The Huffington Post and picked up by numerous mainstream media outlets.
Eventually, the IRS paid NOM $50,000 but the damage done was incalculable. People were fired and donors were frightened off. In short, the IRS information was used to attack an organization based on its goals and to attempt to stigmatize and intimidate its present and future donors.
Kamala Harris used the requirement to disclose donors on income tax returns as a way of attacking Americans for Prosperity.
This is how Mitch McConnell described the action.
In both cases, the government’s action would be inviting harassment and intimidation upon Americans – those whose beliefs were unusual or unpopular. Or, in today’s culture of intimidation, those whose beliefs the left disagrees with. The result is that more speakers stay silent. Fewer Americans choose to exercise their right of free association.
“It’s bad enough to wield government power to chill political speech and invite harassment of citizens – based on what an angry mob might assume their opinions are, based on their private financial records. It’s even more egregious to pursue that nakedly political goal while calling it ‘good government.’ In this country, good government means protecting citizens’ First Amendment rights to participate in the competition of ideas – not trying to shut down that competition. We persuade; we don’t intimidate.
Ask yourself why George W. Bush didn’t do this?
Okay, back to treason and Pearl Harbor and collusion and let the real stuff continue to happen.
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