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Senate Narrowly Votes to Reject IRS Donor Disclosure Rule

Sen. Jon Tester, D-Mont., has been a proponent of disclosure requirements for nonprofits spending money on elections. (Bill Clark/CQ Roll Call file photo)
Sen. Jon Tester, D-Mont., has been a proponent of disclosure requirements for nonprofits spending money on elections. (Bill Clark/CQ Roll Call file photo)

The Senate voted 50-49 to repeal a rule that shields donors to many nonprofit groups from disclosure to IRS officials.

The dramatic vote was tied at 49-49 with 49 Democrats voting in favor and 49 Republicans against, when Sen. Susan Collins, R-Maine, cast the deciding vote to repeal the rule. Sen. Thom Tillis, R-N.C. was absent.

The resolution by Sens. Jon Tester, D-Mont., and Ron Wyden, D-Ore., would make use of the Congressional Review Act to repeal IRS guidance that would have allowed nonprofit organizations to omit names of major donors — those giving more than $5,000 — from disclosure statements, though they would still have to keep the information if the tax-collecting agency asked for it.

The guidance would have gone into effect next month.

Shortly before Collins broke the 49-49 tie and voted ‘yes,’ Sen. Rob Portman, R-Ohio, was speaking into her right ear, and Tester was speaking into her left.

The measure still needs House approval, which Tester has acknowledged is unlikely to come this Congress. The House has 60 legislative days to repeal new rules under the CRA, so, depending on how long this lame-duck session goes, a Democrat-controlled House could potentially be able to vote on the issue early next year, though that is unlikely, said Amit Narang, regulatory policy advocate at Public Citizen.

Republicans had painted the issue as being about privacy, making allusions to the 2013 controversy over whether the IRS had targeted nonprofit groups with conservative ideologies.

“The Treasury Department has said the IRS simply does not need tax returns with donor names and addresses to do its job in this area,” Majority Leader Mitch McConnell, R-Ky., said as the Wednesday afternoon vote neared. “In a climate that is increasingly hostile to certain kinds of political expression and open debate, the last thing Washington needs to do is to chill the exercise of free speech and add to the sense of intimidation.”

Democrats, though, said the issue was over how much so-called “dark money” will be allowed to influence elections. Wyden called the disparity in views over the issue a “crucial debate,” but phrased it in partisan terms by pointing out the need “to throw out the Trump pro-dark money.”

“This is an opportunity today to vote for sunshine in our elections, to say that sunshine is again the best disinfectant, there is none other like it for corruption in our elections,” Wyden said on the floor.

In formulating the new guidance, the IRS noted that the previous disclosure requirement increased compliance costs for some filers, consumed the time of IRS employees who had to redact names from disclosure requirements before making the documents public, and posed a risk of inadvertent disclosure of information about donors.

Kate Ackley contributed to this report.

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