Young America’s Foundation has filed a federal lawsuit challenging the IRS’s practice of collecting confidential donor information from organizations, arguing the policy threatens the First Amendment rights of donors, and puts donors’ privacy at risk.
The lawsuit, filed on YAF’s behalf by the National Taxpayers Union Foundation’s Taxpayer Defense Center, asks a federal court to stop the IRS from requiring the organization to turn over the names and personal information of its donors each year.
While the donor information collected is not made public, nonprofits are required to submit the names, addresses and contribution amounts of their largest donors to the IRS through a form known as Schedule B.
YAF argues the government has never shown why it needs to collect this information from every charitable organization in the country.
“The IRS should not be stockpiling confidential donor information it rarely uses and has repeatedly failed to protect,” the complaint states.
The lawsuit follows one of the largest taxpayer privacy breaches in IRS history. In 2023, former IRS contractor Charles Littlejohn pleaded guilty to illegally leaking thousands of confidential tax records including YAF confidential tax information.
YAF believes that requiring nonprofits to hand over donor information discourages Americans from supporting causes they believe in if they fear their identities could someday be exposed.
The lawsuit points to a 2021 U.S. Supreme Court decision that struck down California’s requirement for charities to submit confidential donor lists to the state. In that case, the Court recognized that forcing organizations to disclose their supporters can discourage people from exercising their First Amendment rights.
YAF argues the IRS’s nationwide donor reporting requirement raises the same concerns. The lawsuit notes that the IRS rarely relies on donor identities and can request donor information directly if a specific investigation ever requires it. Because of that, YAF argues there is no reason for the government to collect and store confidential donor lists from every nonprofit every year.
This case has implications far beyond YAF. Thousands of charities, educational organizations, religious groups and nonprofits across the country are required to submit confidential donor information to the IRS each year.
