C4L Chairman Ron Paul, submitted the following comments on the proposed IRS rule, "Substantiation Requirement for Certain Contributions" (REG-138344-13.) This rule would allow charities to solicit the Social Security number from donors.
Here are Dr. Paul's comments:
Comments of the Honorable Dr. Ron Paul on
Substantiation Requirement for Certain Contributions (REG-138344-13)
Docket ID: IRS-2015-0049
Agency: Internal Revenue Service (IRS)
Parent Agency: Department of the Treasury (TREAS)
December 16, 2015
As founder and President of the Foundation for Rational Economies Education (FREE), a 501(c)(3) educational organization, founder and CEO of FREE's Ron Paul Institute for Peace and Prosperity, and founder and Chairman of the Campaign for Liberty, a 501(c)(4) organization, I urge the Internal Revenue Service (IRS) to reject the proposed rule "Substantiation Requirement for Certain Contributions" (REG-138344-13.)
My main objection to this proposed rule is that it allows charitable organizations to collect the social security number of those who donate over $250.00 dollars in a year. Expanding the IRS's authority to collect social security numbers, even on a strictly voluntary basis, is disturbing for a number of reasons. First, it is quite possible that a future IRS may, by making a simple one-word change in the IRS's regulations, force 501( c )(3)'s to give the IRS the social security numbers of their major donors.
It is ironic that the IRS is considering this rule the same week that the Office of Personal Management (OPM) finally finished notifying the 40 million Americans whose personal information may have been comprised when OPM's records were hacked this summer. The OPM hack is just the latest example of government's failure to protect personal information. The federal government's repeated failures to protect personal information from hackers and identity thefts are one reason this proposal should be rejected. This is especially the case since a database containing the social security numbers of Americans with the resources to make substantial donations to charities will make a very attractive target to identity thieves.
If individuals think that making large donations to charitable organizations will put them at risk of identity theft they will be less likley to support charitable organizations. It is hard to see how the American people benefit from an IRS rule that reduces charitable giving.
This rule is also troubling given the IRS's long history of harassing taxpayers because their political views and activities displeased IRS officials or certain powerful politicians. Everyone is familiar with the allegations that the IRS intentionally delayed numerous applications from "Tea Party" and limited government groups for 501(c)(3) and (c)(4) status. Another case of IRS agents using their power to harass those whose political views they disagreed with occurred in 2014. In that case, the IRS was forced to issue an apology and pay $50,000 to the National Organization for Marriage because an IRS employee gave the names of their donors to the organization's political enemies.
Presidents of both parties have used the IRS to harass their political opponents. Richard Nixon's attempt to use the IRS to punish his enemies was the basis for one of the articles of impeachment filed again him. During the 1990s, an IRS agent allegedly told the head of an organization supporting then-President Bill Clinton's impeachment, "What do you expect when you target the President?"
Given this history of the IRS being used to silence taxpayers who dared challenge the status quo, can anyone doubt this rule will partially discourage donations to organizations that advance ideas and policies disfavored by the powerful?
This new rule is being justified on the grounds that it will make information collection more efficient. In a free society, efficiency of tax collection must always take a back seat to protecting individuals from harassment by both private and public criminals.
The proposal to allow 501(c)(3) organizations to collect social security numbers from their donors will endanger the privacy and civil liberties of donors. This will expose those donors to increased risk of identity theft. By increasing fears of identity theft, this proposal could reduce charitable giving. This proposal could also chill public debate by making some donors reluctant to support organizations that advance ideas that are disfavored by those currently holding power. Therefore, I strongly urge the IRS to reject this misguided proposal.
As you might recall, last year the IRS fined Campaign for Liberty because we refused to hand over our donor list. Campaign for Liberty will never hand over information on our donors to the IRS, where our donors might face harrassment from the IRS for their political beliefs.