April 30, 2021

Shaheen & Hassan Join Senate Effort Urging Treasury, IRS to Reverse Trump Administration’s Rule that Eliminated Disclosure Requirements for Groups Engaged in Political Activity

(Washington, DC) – U.S. Senators Jeanne Shaheen (D-NH) and Maggie Hassan (D-NH) joined a letter led by Senators Amy Klobuchar (D-MN), Jon Tester (D-MT) and Ron Wyden (D-OR) urging the Treasury Department and Internal Revenue Service (IRS) to reverse the Trump Administration’s decision to eliminate disclosure requirements for certain tax-exempt organizations that engage in political activity.

 

The letter to Treasury Secretary Janet Yellen and Internal Revenue Service Commissioner Charles Rettig highlighted how eliminating the requirement that tax-exempt groups disclose the source of their contributions used for political activity undercuts efforts to enforce prohibitions against foreign spending in U.S. elections and detect other illegal activity. The Senators stressed that reinstating the rule is a critical step in preventing special interests and foreign actors from exploiting loopholes at the expense of the American people.

 

“For decades, the Treasury Department and IRS required 501(c)(4) organizations and other tax-exempt groups that are eligible to engage in political advocacy to identify, in confidential filings, the names and addresses of individual donors who make significant financial contributions over $5,000,” said the Senators.

 

They continued: “Reinstating this rule is a critical step in preventing special interests and foreign actors from exploiting loopholes at the expense of the American people. We strongly urge you to reconsider the prior administration’s decision and reinstate the requirement that certain tax-exempt organizations engaged in political activity disclose information about their major donors to the IRS.”

 

Shaheen and Hassan have led efforts in Congress to stem the flow of dark money, including by helping introduce the For the People Act, a package of comprehensive reforms that would end the influence of special interests in our politics and make government work for the people. Shaheen and Hassan have also led efforts to mitigate the damage created by the destructive Citizens United decision. During the 116th Congress, Senator Shaheen introduced a Constitutional Amendment with former Senator Tom Udall (D-NM), the Democracy for All Amendment, which Senator Hassan also cosponsored, that would overturn the Citizens United ruling and help get big money out of politics. Shaheen and Hassan have long supported Congressional action to crack down on dark money in politics. Shaheen called out millions of dollars’ worth of dark money ads in New Hampshire and across the country that sought to derailed bipartisan efforts in Congress that Senator Hassan led to end surprise medical billing. A report by the New York Times revealed that the group behind this ad campaign, Doctor Patient Unity, is a front for private equity firms on Wall Street.  

 

The full text of the letter can be found here and below:

 

Dear Secretary Yellen and Commissioner Rettig:

 

We write to urge the Treasury Department and Internal Revenue Service (IRS) to reverse the Trump Administration’s decision to eliminate disclosure requirements for certain tax-exempt organizations that engage in political activity. As it stands, this policy weakens federal tax laws, campaign finance laws, and longstanding efforts to prevent foreign interference in U.S. elections.

 

For decades, the Treasury Department and IRS required 501(c)(4) organizations and other tax-exempt groups that are eligible to engage in political advocacy to identify, in confidential filings, the names and addresses of individual donors who make significant financial contributions over $5,000. In 2018, the IRS attempted to unilaterally eliminate this requirement. That same year, the Senate voted in a bipartisan manner to overrule the IRS’s action, and the rule was eventually struck down by a Federal court. Despite the Senate vote and Federal court ruling, in May of last year the Treasury Department and IRS finalized a regulation eliminating this longstanding disclosure requirement, allowing 501(c)(4), 501(c)(5) and 501(c)(6) groups engaged in political activity to hide the identities of major donors from the IRS.

 

Eliminating the requirement that tax-exempt groups disclose basic information about the source of their contributions undercuts efforts to enforce prohibitions against foreign spending in U.S. elections and detect other illegal activity. It also undermines the ability of the U.S. government to police the wave of “dark money” that has flooded our political system in the decade since the Supreme Court’s decision in Citizens United v. Federal Elections Commission. According to a study by the nonpartisan Center for Responsive Politics, dark money groups have spent over $1 billion to influence U.S. elections since 2008.

 

As secret campaign contributions continue to pour into federal elections, this IRS rule is a major step backwards for transparency and will allow dark money to continue to corrode our political system. The IRS needs every tool at its disposal to ensure that these organizations are complying with the law.

 

Reinstating this rule is a critical step in preventing special interests and foreign actors from exploiting loopholes at the expense of the American people. We strongly urge you to reconsider the prior administration’s decision and reinstate the requirement that certain tax-exempt organizations engaged in political activity disclose information about their major donors to the IRS.

 

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