The IRS made an announcement this week, and for once the news was good.
Last month, we alerted readers that the tax-collecting agency had proposed a new regulation that threatened to make administration and fundraising more difficult for non-profit organizations. The proposal was not the end of the world, but it could have significantly dampened philanthropy. So it was encouraging that the agency has decided to withdraw it.
It would have encouraged but not required (at least not yet) charities to collect the Social Security numbers of donors. The idea was to provide a backup for the system that already exists for verifying tax-deductible donations, usually consisting of a letter acknowledging the gift.
Charities feared, justifiably, that this would prove to be a precursor to a mandatory system that could easily discourage giving and stretch their administrative tasks beyond their capabilities. The IRS itself, though little heeded, discourages Americans from giving out their Social Security numbers. And most non-profit organizations are not good at data security. This is an especially important point in an era when even the federal government, with all of its resources, has proven incapable of protecting citizens’ personal data.
A requirement to collect Social Security information could put many worthy causes just one high-profile data theft away from being shunned by philanthropists.
There was, moreover, no real need for the proposed change. The system in place was working fine.
Fortunately, the IRS recognized the wisdom in these arguments. It announced this week that it was withdrawing the proposal. This came after more than 200 organizations signed a letter outlining their concerns, and 38,000 people made public comments on the matter.
“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,” the IRS noted this week in the Federal Register. “Accordingly, the notice of proposed rulemaking is being withdrawn.”.
Count this as one small victory for responsive government. It is heartening to see an agency listen and genuinely consider public opinion in an epoch when the overweening executive is more likely to regard the comment period as an irritant than a chance to learn.
That said, the ability of government agencies to impose new burdens with or without listening remains a problem that Congress should always keep in mind when writing laws. Whether they deal with the IRS, the EPA, the TSA, or the Labor Department, laws must ensure that the bureaucracy remains the enforcer and not the maker of the nation’s laws.
