Is it campaign finance reform, or yet another threat of harm to First Amendment rights affecting donors and tax-exempt organizations? This spring, the U.S. House of Representatives passed an “omnibus” campaign finance bill called “For the People Act,” (H.R. 1) which addresses a wide range of election and related matters. The Act expressly excludes Section 501(c)(3) public charities from its donor disclosure and reporting requirements, but not Section 501(c)(4) social welfare or other tax-exempt organizations. While the proposed legislation likely will go nowhere in the Senate, it warrants notable mention in the following ways.
The Silver Lining of the Dissent in Americans for Prosperity Foundation's Denial of Rehearing "En Banc"
Can controversial groups expect government protection from mandatory disclosures of their participants? Not as the Americans for Prosperity Foundation has painfully learned in California. APF suffered yet another court setback in the federal appellate Ninth Circuit Court of Appeals’ recent denial of an en banc (full court) rehearing. APF has fought the California Attorney General’s mandatory donor disclosures in annual filings, citing First Amendment freedom of speech, association rights, and related concerns for donors’ privacy and protection from harassment.
Are tax-exempt organizations required to disclose their major donors on their IRS Form 990 Schedule B’s, or not? In July 2018, the IRS issued Revenue Procedure 2018-38, answering “no” for Section 501(c)(4) and other tax-exempt organizations, but leaving the disclosure requirement intact for Section 501(c)(3) organizations and Section 527 political action committees (known as PACs).