Since it was opened to public comment in September, the proposal — which would have permitted, though not required, charities to file an additional return with the IRS containing detailed information about donors who contribute $250 or more — faced vocal opposition from nonprofit organizations and others, with nearly thirty-eight thousand comments filed during the comment period. In December, Independent Sector, the National Council of Nonprofits, the Council on Foundations, and more than two hundred groups filed joint comments, arguing that the proposal would "expose the public to increased risk from identity theft, impose significant costs and burdens on nonprofit organizations, and create public confusion and disincentives for donors to support the work of nonprofits."
"The Treasury Department and the IRS received a substantial number of public comments in response to the notice of proposed rulemaking," the IRS said in its statement. "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."
"This is a prime example of the power of nonprofit advocacy and what can be achieved when charitable nonprofits speak up to protect the public, our missions, and the communities we serve," said Tim Delaney, president and CEO of the National Council of Nonprofits, which will continue to support a House bill barring the IRS from requiring or accepting donors’ Social Security numbers to prevent future iterations of the proposal. "In the future, we invite Treasury and the IRS to work with the nonprofit community to develop sound solutions before they issue proposals that will harm the public."