Should a Trump Admin Rule Be Repealed to Let the IRS Require That Non-Profits Disclose Their Donors? (S. Joint Res. 64)

What is S. Joint Res. 64?

(Updated January 2, 2020)

This resolution would repeal the Treasury Dept.’s “Returns by Exempt Organizations and Returns by Certain Non-Exempt Organizations” rule, which exempted non-profit organizations that aren’t under 501(c)3 from having to disclose their donor records to the IRS. The rule was finalized on July 30, 2018. Congress has the authority to overturn it within 60 legislative days with simple majority votes in both chambers along with the president’s signature under the Congressional Review Act, and if this resolution were enacted the Treasury Department would be prohibited from issuing a similar rule without congressional approval.

Argument in favor

The Trump administration’s rule change allows mega-donors and dark money to influence American politics from the shadows. This resolution repeals the rule to require disclosure and prevent the Trump administration from trying to change the rules again.

Argument opposed

Making a donation to a non-profit is a form of free, protected speech. Requiring non-profits to disclose their donor lists would have a chilling effect on Americans’ political engagement, as donors could fear retaliation or intimidation by those who disagree with them.

Impact

Donors and non-profits; and the Treasury Department.

Cost of S. Joint Res. 64

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Sen. Jon Tester (D-MT) introduced this bill to overturn the Trump administration’s non-profit donor disclosure rule:

“We must crack down on the dark money flooding our political system, that's why we are taking an aggressive approach and introducing this legislation to protect our democracy and hold special interests accountable with transparency. We cannot allow special interests to hide in the darkness.”

Original cosponsor Sen. Ron Wyden (D-OR) added:

“This measure reverses course on an undemocratic Trump agenda to empower shadowy groups that seek to buy our elections. It couldn't come at a more important time. Over the next few weeks political ads will be flooding the airwaves. Because of the Trump administration's new dark money rule, tax authorities won't know whether those ads are being paid for by foreign governments or individuals. Opposition against my resolution with Senator Tester is an endorsement of the Trump administration's plan to further cripple campaign finance transparency.”

The Republican Policy Committee’s analysis of this resolution included the following argument in opposition:

“The Supreme Court held in 1958 that the Constitution protects the anonymity of members of political groups when disclosure would effectively curtail their political activity. This arose in the context of civil rights, when the state of Alabama sought lists of NAACP agents and supporters. Recognizing that disclosures had been used to repressive ends in the past, the court disallowed Alabama’s disclosure demands. Opponents of the CRA point to leaks of taxpayer information from the IRS as a likely consequence of continuing 501(c) donor disclosure requirements. Given IRS’s recent history relating to 501(c) oversight, this kind of disclosure and the subsequent retaliation by political opponents would have a chilling effect on political speech, the bill’s opponents say.”

This legislation has the support of 37 cosponsors in the Senate, all of whom are Democrats.

Media:

• Sponsoring Sen. Jon Tester (D-MT) Press Release
  
• Republican Policy Committee (Opposed)
  
• The Hill