Today, the IRS announced that it had withdrawn its proposed regulations on gift substantiation which would have encouraged nonprofits to collect, store, and report donors' Social Security Numbers, placing a tremendous liability and burden on the nonprofit sector.
The IRS received 37,977 comments during the comment period, with the overwhelming majority fervently against the proposed rules. Many networks, from the United Way, Independent Sector, and the National Council of Nonprofits, rallied their members and stakeholders in opposition to the rulemaking.
The IRS issued the following statement:
“The Treasury Department and the IRS received a substantial number of public comments in response to the notice of proposed rulemaking. 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 for purposes of the specific-use information return. In response to those comments, the Treasury Department and the IRS have decided against implementing the statutory exception to the CWA requirement, and therefore that exception remains unavailable unless and until final regulations are issued prescribing the method for donee reporting. Accordingly, the notice of proposed rulemaking is being withdrawn.”
Even if the IRS had not withdrawn their proposed rules, Pennsylvania Rep. Keith Rothfus introduced the "Charitable Giving Privacy Protection Act", which would prevent the IRS from making such a rule.
Thank you to all of our members who submitted comments and helped exercise our Collective Voice to stop these misguided rules from going into effect.