Senate Republicans are asking what legal grounds, if any, the Internal Revenue Service has for demanding donor information from various Tea Party and conservative groups.
A letter from the senators to IRS Commissioner Douglas H. Schulman noted: “We remain concerned that the IRS is requesting the names of donors and contributors to organizations that apply for tax-exempt status. In doing so, the IRS appears to be circumventing the statutory privacy protections that Congress has long provided donors.”
The letter is signed by Mitch McConnell of Kentucky, the Senate minority leader, and Orrin Hatch of Utah, ranking member of the Finance Committee with oversight responsibility of the IRS. Other senators signing the letter included Rand Paul of Kentucky; John Cornyn and Kay Bailey Hutchinson of Texas; Jon Kyl of Arizona; Lamar Alexander and Bob Corker of Tennessee; Mike Enzi of Wyoming; John Thune of South Dakota and Pat Roberts of Kansas.
The New York Times reported several months ago that the IRS had sent dozens of questionnaires to Tea Party organizations demanding they reveal their political leanings, donors, and activities. These same Republicans sent a similar letter that month, referring to the Chattanooga Tea Party and Waco Tea Party, the Ohio Liberty Council Corporation, and the Kentucky 9/12 Project. The Times reported at that time that at least 16 non-profit Tea Party organizations were claiming that the IRS was harassing them.
Current law allows non-profits to withhold the names of donors. The 91st Congress denied the Treasury Department the authority to disclose the names and addresses of financial contributors. The 100th Congress passed an exemption from disclosure of names and addresses of financial contributors by expanding public inspection of certain annual returns, reports, and applications for exemption of tax-exempt organizations.
“The (Internal Revenue Service) Code specifically states that the names and addresses of donors are not required to be available for public inspection when viewed at this physical location,” the Senate Republican letter reads. “Unfortunately, the public release of private donor information exposes citizens to possible harassment and intimidation by those who oppose the goals of the charitable organization.”
In March, Democrats called for the IRS to enact regulations that would cap the amount such non-profits can spend on political campaigns and require the organizations to disclose on all written and online solicitations how much of their funding is used for political campaigns.
“In recent years, this daylight between the law and the IRS regulations has been exploited by groups devoted chiefly to political election activities who operate behind a façade of charity work,” said the March 12 letter signed by Democratic Senators Michael Bennett of Colorado. Charles Schumer of New York, Sheldon White House of Rhode Island, Jeff Merkley of Oregon, Tom Udall of New Mexico, Jeanne Shaheen of New Hampshire, and Al Franken of Minnesota.
Democrats and liberal groups have been highly critical of the Citizens United decision by the Supreme Court that lifted restraints on political speech. One liberal group, Americans United for Change, even announced a $25,000 reward for any employee who would tell the organization if their employer donated money to a super PAC.
Democrat organizers have long used nonprofits, in particular churches and community organizations, to promote their political agendas.