Collecting Donor Social Security Numbers

Dear Kim,

I have heard that the IRS is going to encourage nonprofits to ask for the social security number of their $250+ donors. Is this true? Why would they do that?

~Puzzled and concerned

Dear Puzzled,

You have heard accurately. This comes from a proposed amendment to the Income Tax Regulations. The amendment would alter Code section 170(f)(8), giving nonprofits the option to collect information for gifts of $250 or more and submit it on behalf of the donor. The option would serve as an alternative to current regulations, which requires that donors of $250 or more receive a thank you note (called by the IRS a CWA or Contemporaneous Written Acknowledgement) to substantiate the donation in order to claim a charitable deduction.

Ostensibly this is to help donors establish that their claim for charitable deductions is accurate, and helps them if they lost the acknowledgement. Further right now this being proposed as an option, not a requirement. However, no one that I know can see any added value to this suggestion as there is no evidence that the current system is not working. Personally I think it will die easily—aside from the fact that there is no need for it, the right wing is the most opposed to it, followed by anyone with any knowledge or commitment to privacy, followed by many of us concerned about the expansion of the surveillance state.

~Kim Klein