IRS, one of the most hated US government agencies, appears to be seeking a way to tax churches and non profits. According to Fox News, the Obama administration is seeking to change 501 (c)(3) non-taxible status on donation of $250 or more, which includes non-profit charities and churches. The way the IRS would receive this information from churches and non-profit charities would be a rule that suggests these groups must request a social security number from anyone donating $250 or more.
The Internal Revenue Services states that the new means of seeking taxation will be “optional,” but United Way of Escambia County, Florida representative Andrea Krieger wrote a piece in the Pensacola News Journal stating that this move would have a “chilling effect” on donations to charities, and asks “Why on earth would we make it harder for people to help other people?”
“Why on earth would we make it harder for people to help other people? Essentially, that is the concern may nonprofit professionals have in regards to the Internal Revenue Service (IRS) Proposed Rule: Substantiation Requirement for Certain Contributions. While this rule is voluntary, it creates the ground work for a mandatory rule. It seems most regulation that becomes controversial starts with a promise that the process is voluntary. Unfortunately, history has proven that voluntary rules are the first step to intrusive legislation that eventually causes the general public to question the reason for governmental interference.”
Krieger alleges that it would cost millions of dollars in lost donations, and a “tremendous threat of increased identity theft to the millions of individuals who donate to charity.” D.C. political lawyer Cleta Mitchell sees this as a major issue for church donations, and said it is the “No. 1 regulation” that people are commenting on right now.
“It’s the No. 1 regulation that people are commenting upon. It would have a dramatic effect on donors’ decisions on whether or not to contribute. You’d see a lot of $249.99 contributions to every charitable organization in America. It’s preposterous.”
The IRS spoke out against what they called significant “misrepresentations and inaccuracies” in an official statement.
“This project was prompted because some … organizations and donors were interested in using this option. This proposal would impose no mandatory changes to existing rules.”
The IRS says the new tax proposal, which would affect churches and non-profit charities, was proposed in September of this year. They allege that, while some taxpayers were “under exam,” they requested the measure because they “lost” their donation records. Furthermore, they felt that if charities retained records not request their social security numbers for certain levels of donations, it would help them verify their records.
According to Non-profit Quarterly, the National Council of Nonprofits made a statement as well, regarding their concerns with the IRS’s move to collect social security numbers for donations over $250.
“…the proposed voluntary reporting regime is inappropriate because the process could impose significant costs and burdens on nonprofit organizations, would create public confusion and disincentives for donors to support the work of nonprofits, and could lead fraudulent actors to increase targeting donors and reputable nonprofit organizations.”
The social security number decision concerns many taxpayers after the Lois Lerner and IRS debacle that showed that the agency targeted many conservative based groups applying for or having 501 (3) (c) status.
This, of course, at a time when social security numbers seem to be increasingly vulnerable and seeing a dramatic change in how the private sector utilizes them. Using the last four digits, which are ironically, unique to individual Americans. The Inquisitr reported in July about a massive data breach that affected over 91 million taxpayers when hackers managed to obtain their social security numbers through the hack.
The deadline for public comment on the new IRS rules that could eventually force churches and non-profits to request social numbers for donations over $250 is Wednesday December, 16.