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NDANO Submits Comments in Opposition to IRS Gift Substantiation Proposed Regulation

NDANO Submits Comments in Opposition to IRS Gift Substantiation Proposed Regulation
Submitted December 15, 2015

The Board of Directors of the North Dakota Association of Nonprofit Organizations (NDANO) writes to express its strong opposition to the gift substantiation proposed regulation (IRS REG-138344-13) and urge that it be withdrawn and not implemented.

In a state like North Dakota, where 90 percent of charities report annual revenue of less than $500,000, the gift substantiation proposed regulation could result in unreasonable costs and reporting burdens, particularly for small, community-based nonprofits. Further, it would create public confusion and disincentives for donors to support the work of charitable nonprofits in North Dakota. Finally, this regulation has the potential to provide fraudulent actors with the opportunity to target donors and reputable nonprofit organizations.

NDANO strongly believes that a charitable nonprofit should never ask a donor for her or his Social Security number when soliciting donations. If someone is asking in relation to a donation, that should be considered a sign of a scam or fraudulent solicitation. The best consistent message to be shared by charitable nonprofits, Treasury and the IRS is that donors should never be asked to provide their SSNs for gift substantiation purposes.

If implemented, even as a voluntary option, the proposed regulation could result in donors being unwilling to contribute more than $250 to a charitable nonprofit if it asks for Social Security numbers.

In closing, NDANO calls on the IRS and Treasury to withdraw the proposed regulations and join the nonprofit community in publicly stating that there is no legitimate reason for nonprofits to ask individuals to divulge their Social Security numbers to people soliciting donations. The federal government must take action to remove the confusion created by the pending rulemaking. When it comes to Social Security numbers, we ask the federal government to state clearly that “never” is the better answer when a solicitor seeks a taxpayer identification number.

Thank you for your consideration of these concerns.

NDANO Board of Directors