Dark-Money Policy at Treasury Roils New York AG

MANHATTAN (CN) – New rules at the Treasury Department and Internal Revenue Service have made dark money darker by weakening already-lax disclosure rules surrounding donors to charities.

Complaining that the agencies have stonewalled her attempts to find out why, New York Attorney General Letitia James filed a federal lawsuit Monday under the Freedom of Information Act.

“My office depends on these critical donor disclosure forms to be able to adequately oversee nonprofit organizations in New York,” James said in a statement about the action. “Not only was this policy change made without notice, the Treasury and the IRS are now refusing to comply with the law to release information about the rationale for these changes.”

The disclosure obligations at issue concern form 990, a public record that charities must file, often accompanied by a Schedule B document that includes donor information.

In July, the Treasury announced that nonprofit organizations would no longer be required to identify their donors on their annual return. The shakeup means that organizations need only identify the amount contributed for each reportable contribution on their Schedule Bs, beginning with the information returns for taxable years ending on or after Dec. 31, 2018.

James says that the Trump administration made this change without publishing the change or requesting public comment.

Seeking more information, her office filed requests under the Freedom of Information Act requests in October that sought all “emails, memoranda, and Treasury Department reports concerning the development, implementation, consideration, or evaluation” about the policy change.

James says neither the IRS nor the Treasury produced the records.

A representative at the Treasury Department declined to comment, citing agency policy.