IRS drops proposal that could have required SSN with large donations

The IRS is dropping its proposal that would suggest those giving large donations to nonprofits and charities to provide a social security number.

The IRS introduced the amendment in September as a means to better “store, maintain and readily retrieve” taxpayer information.

However, nonprofits lashed out against the proposed changes, saying that most small charities would not equipped to securely store databases of social security numbers, leaving the information open to hackers.

Nonprofits were also concerned that the proposed amendments would result in a sharp decrease in large gifts from wary donors. Tim Delaney, president and CEO of the National Council of Nonprofits, told Scripps in December that he would expect a sharp increase in $249.99 donations if the amendments passed.

The IRS took suggestions on the proposed changes until mid-December. The measure received nearly 38,000 comments, many of them from concerned members of nonprofits.

“I am pleased the IRS has listened to reason and has scrapped this plan,” said Sen. Pat Roberts (R-Kan.), who passed legislation in December to block the proposed changes. “The rule would have had a chilling effect on charitable giving and would have added a costly burden to charitable organizations.”

Alex Hider is a writer for the E.W. Scripps National Desk. Follow him on Twitter @alexhider.