N.Y., N.J. sue IRS over nonprofit donor information

May 6, 2019

New York and New Jersey sued the IRS Monday, arguing the agency is stonewalling attempts to peer behind the decision-making that led to new rules that shield some nonprofits from having to disclose their donors.

The IRS said it doesn’t need the information and that collecting it left it vulnerable to illegal exposure but New York said it relied on the information for its own watchdog purposes, and it wants to know more about why the Trump administration nixed it.

“My office depends on these critical donor disclosure forms to be able to adequately oversee nonprofit organizations in New York,” said state Attorney General Letitia James.

She said she’d used federal open-records laws to try to get documents about the decision, but has only gotten a weak response.

“No one is above the law not even the federal government and we will use every tool to ensure they comply with these regulations to provide transparency and accountability,” she said.

Nonprofit donor information has proved deeply controversial.

While supposed to be protected, some donor data has leaked in high-profile cases, causing embarrassment to the agency but also headaches for the groups violated.

The IRS and Treasury Department in July said they would no longer demand lists from charities organized under 501(c)(3) of the tax code.