The United States government is making it easier for “dark money” donors to keep their contributions, well, in the dark. The Treasury Department on Monday said it planned to end requirements that certain tax-exempt organizations identify their financial contributors on their tax returns.
The decision means groups such as the National Rifle Association, Planned Parenthood, and the AARP will no longer have to tell the IRS who’s giving them money.
The decision landed the same day as the Justice Department announced the arrest of Maria Butina, a Russian national with NRA ties who is accused of trying to influence US politics. Ethics experts say Treasury’s maneuver will make identifying activities like those Butina has been accused of even harder to track.
Labor unions, volunteer fire departments, issue advocacy groups, local chambers of commerce, veterans groups, community service clubs, and other so-called social welfare 501(c)(4) groups or those that don’t generally get tax-deductible contributions will be freed of requirements that they list the names or addresses of their donors on their annual returns with the IRS.
Since the Citizens United Supreme Court decision in 2010 that held political spending is a form of protected speech under the First Amendment, the IRS has been flooded with applications from groups seeking 501(c)(4) status. A number of well-known organizations have it, including the Democratic Socialists of America, Americans for Prosperity, and the NRA.
Before this change, such groups had to report to the government the names of donors who gave them more than $5,000 a year. The names of donors weren’t revealed to the public, but the amounts were, and government officials were able to see where money was coming from. After the new reporting requirements kick in, even the IRS won’t know.
“It is quite clear that what they want is to not enable enforcement that is actually part of the law by the IRS on issues of whether or not some of these groups are actually political committees,” Ann Ravel, a former Democratic commissioner on the Federal Election Commission (FEC), told me. “That’s the whole purpose of this.”
Dark money is about to get a little darker
Dark money is political spending meant to influence voter decisions and politics where the source of funds is undisclosed. Donors can give thousands or millions of dollars to push issues and wield influence through groups like 501(c)(4)s without ever having their identities revealed — although 501(c)(4) groups can only take in “dark money” as long as political activities aren’t their primary purpose.
The Center for Responsive Politics notes that political organizations spent more than $15 million in 2015 to influence the 2016 elections outside of party or official campaign structures; only $5 million of that was reported to the FEC.
The revised requirements will go into effect for taxable years ending on or after December 31, 2018, meaning the reporting requirements will kick in for returns due after May 15, 2019. Tax-exempt charitable organizations, those listed under section 501(c)(3) of the IRS code, will still have to say who’s giving them money.
Paul S. Ryan, vice president at the watchdog group Common Cause, said Americans for Prosperity, the advocacy group founded by the Koch brothers, has been fighting for the IRS change for years and has actively opposed state efforts to expand donor
Senate Majority Leader Mitch McConnell
Sourse: vox.com
