IRS Withdraws Substantiation Proposal Thanks to Thousands of Nonprofit Comments

Thanks to thousands of comments from nonprofits across the country, the Internal Revenue Service (IRS) has dropped its proposal to create a new substantiation form that could have had charities asking for donor's Social Security numbers.

THANK YOU if you submitted comments to the IRS using AFP's template submission system. Your input matters, and this successful outcome demonstrates that the process works. We can make a difference and help advance policies that support the fundraising profession while protecting our donors and their privacy.

To read the IRS announcement, click here.

Last fall, the IRS had proposed new regulations that would modify its requirements that nonprofits obtain a "contemporaneous written acknowledgement" for contributions of $250 or more. Under current law, a donor claiming a deduction of $250 or more is required to obtain and keep a contemporaneous written acknowledgment for a charitable contribution.

The regulations would have created a new "optional" information form that charities would file with the IRS by February 28 each year, as well as provide a copy to each donor who had given $250 or more for their tax return. Most concerning among the form's requirements was the mandate for the nonprofit to collect the donor's tax identification number (their Social Security number in most cases), an action which would impose other legal requirements on nonprofits to retain and protect those Social Security numbers from identify theft.

But the IRS received enough comments from concerned fundraisers and nonprofits, including formal comments from AFP, that it has decided to drop the proposal. This move should end the matter, but AFP will alert members if additional action is required.

Questions can be emailed Jason Lee at jason.lee@afpglobal.org.

Thank you again for your participation in AFP and the public policy process!