Fractured Atlas Celebrates IRS Withdrawal of Burdensome Donor Documentation Proposal

I have a wonderful update to share on the advocacy that Fracture Atlas and others in the nonprofit space took part in to oppose proposed changes at the IRS that would have dramatically complicated the way nonprofits accept gifts from donors. This post was originally published here on the Fractured Atlas blog.

Last month, I published a post to the Fractured Atlas blog to share some good and bad news:

The bad news was a series of proposals by the Internal Revenue Service (IRS) to change the way nonprofits document and regulate donations from donors. The changes, which would have compelled nonprofits to collect some donors’ Social Security numbers (SSN) or taxpayer identification numbers (TIN), would have had a profoundly negative impact on Fractured Atlas members, as well as the arts and nonprofit communities at large.

The IRS currently requires nonprofits to substantiate gifts of $250 or more by providing written documentation to donors that state the amount of the gift. Most nonprofits already have a sufficient system in place that gets this done. While donors would have the choice of whether or not to share their SSNs or TINs, many would be discouraged from giving more than $250 — or at all — and nonprofits would be burdened with the responsibility of making costly technological and security updates to properly protect such sensitive donor data.

Fractured Atlas shared a call to action last month and submitted an official comment to the IRS detailing how these changes would negatively impact our organization and members. We took a stand alongside many of our peers from the Performing Arts Alliance (PAA), a national coalition of arts services organizations.

While the good news then was that we had an opportunity to unite as a community and make our voices heard, the good news today is that our advocacy paid off.

As of yesterday, January 8, the IRS has withdrawn its notice of proposed rulemaking. You can read the statement in full, and here’s an excerpt:

“The Treasury Department and the IRS received a substantial number of public commentsin response to the notice of proposed rulemaking. 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.”

In other words, the nonprofit community spoke up and our voices were heard. Many thanks to those of you who united with us on this issue — it made all the difference.

Questions? Reach out to me by email at courtney.duffy@fracturedatlas.org or on Twitter @cduffy90.

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