IRS Ruling on Political Donation Reporting Sets Off Campaign Finance Fight

Monday’s announcement by the Treasury Department that it will no longer collect information about donors to some political non-profits was met with applause from Senate Majority Leader Mitch McConnell, perhaps the leading advocate for unrestricted campaign donations, even as it ignited a campaign finance fight in the middle of the 2018 midterm election. “It’s bad enough to wield government power to chill political speech and invite harassment of citizens — based on what an angry mob might assume their opinions are, based on their private financial records,” the Kentucky Republican said on the Senate floor. “It’s even more egregious to pursue that nakedly political goal while calling it ‘good government.’ In this country, good government means protecting citizens’ First Amendment rights to participate in the competition of ideas — not trying to shut down that competition.” For McConnell, campaign spending is key to his expansive interpretation of the First Amendment. Senate Democrats, led by Finance ranking member Ron Wyden of Oregon, responded with criticism to the announcement. Wyden said in a statement that he would now oppose President Donald Trump’s choice to head the IRS, Charles Rettig, unless there’s a commitment to rescind the new policy. “Trump’s Treasury Department made it easier for anonymous foreign donors to funnel dark money into nonprofits the same day a Russian national linked to the NRA was arrested for attempting to influence our elections,” Wyden said. “It’s the latest attempt by Secretary [Steven] Mnuchin and Donald Trump to eliminate transparency and keep officials and lawmakers from following the money.” The Finance panel is scheduled to mark up the Rettig nomination on Thursday morning, the committee announced Monday. Sen. Jon Tester of Montana was among the first Democrats to blast the new IRS policy. “This is the swampiest, darkest, dirtiest decision,” Tester said in a statement. “We need more transparency in our campaigns, not less.” Montana is among a group of states whose campaign finance laws have required disclosure and transparency in how political money is spent.  Under the new policy, the Treasury will only require tax-exempt groups that generally receive tax-deductible contributions to report on their donors. The Monday night announcement said the action will ease the reporting burden on groups like volunteer fire departments, but the announcement also noting it would lift the requirement for reporting from groups engaged in issue advocacy. That’s the key, since many so-called “dark money” political operations are covered under parts of the tax code that do not have statutory reporting requirements on their donors. “Americans shouldn’t be required to send the IRS information that it doesn’t need to effectively enforce our tax laws, and the IRS simply does not need tax returns with donor names and addresses to do its job in this area,” Mnuchin said in a statement on Monday. “It is important to emphasize that this change will in no way limit transparency. The same information about tax-exempt organizations that was previously available to the public will continue to be available, while private taxpayer information will be better protected.” Republicans have been particularly critical of the IRS practice of data collection, warning of the targeting of politically engaged conservative groups. In his floor speech, McConnell said that at times the IRS has not protected confidential donor information from an “angry mob.” “It fails to protect this private information from leaking to the army of angry left-wing activists who stand eager to harass and bully anyone who’s contributing to national conversations with political views that they disagree with,” McConnell said. Get breaking news alerts and more from Roll Call on your iPhone or your Android.