Noem Votes to Protect Dark Money from IRS/Public Scrutiny

Kristi Noem doesn’t want you to know which fatcats are pouring the Meow Mix in her dish.

Yesterday, the U.S. House passed H.R. 5053, the Newspeakingly named “Preventing IRS Abuse and Protecting Free Speech Act.” The bill would prohibit the IRS from requiring 501(c) organizations to report the names and addresses of anyone who gives them more than $5,000. 501(c) groups can launder donor money into “dark money” so no one knows who’s really bankrolling “dark money” various candidates.

Rep. Noem didn’t just vote for this money shell game for her rich friends; she’s co-sponsoring it. Noem and her party leaders pretend to be responding to evidence that some IRS employees singled out conservative non-profits for scrutiny (allegations that led to no criminal charges). Noem and friends seem more concerned with protecting the identity of rich donors like Charles Koch, who supports this bill (“fed up with politics as usual“? yeah, sure) from the “enemies list” they confabulatorily ascribe to Barack and Hillary.

The First Amendment does protect anonymous speech. But if you’re going to play in the political realm, especially if you’re contributing the kind of money that can influence lawmakers ($5,000—yeah, I think checks that big can get a Congressperson’s attention), you should put your name to your support. The White House agrees, noting that H.R. 5053 “would constrain the IRS in enforcing tax laws and reduce the transparency of private foundations.”

We can’t count on South Dakota’s Senators to knock down this sop to their wealthy masters. We’ll have to count on the President to use his veto pen… or perhaps on Democrats to expand their current filibuster to block H.R. 5053 and everything else until the Senate acknowledges that letting rich people hide their political donations is less important than protecting regular Americans from more mass shootings.


12 Responses to Noem Votes to Protect Dark Money from IRS/Public Scrutiny

  1. One intriguing thing about the controversy over this legislation is that the IRS had already begun doing something similar using regulation. In other words, it’s Congressional Republicans *and the IRS* against Congressional Democrats and the White House.

    Both the legislation and the IRS’s own proposal would continue to require donations from a tax-exempt group’s “insiders” to be confidentially disclosed to the IRS.

    For more on this, see my NPQ article from two weeks ago, when the bill passed the House Ways and Means Committee:

    State Regulators and Watchdogs Object to Changes in Donor Disclosure by Nonprofits
    https://nonprofitquarterly.org/2016/05/25/state-regulators-watchdogs-object-changes-donor-disclosure-irs/

  2. mike from iowa

    Wingnuts in congress have cut the IRS budget so they are behind in manpower and can’t do their normal functions. Which, I suppose, is the reason the budget has been cut in recent years.

  3. Who is wyland, npq and does he write for reuters?

    Jay, and now Paula can use This Kind Of Info To Beat Thune And Noem.

  4. Those donors Noem would hide are precisely the ones that need to be identified which makes me wonder what she wants to hide.

  5. Also remember that so-called “dark money” is not unique to conservatives. Liberal millionaires and business tycoons pump almost as much money into 501(c)(4) superPACs as do conservatives. It’s a very competitive and comparable marketplace.

  6. Gun manufacturers want to hide their donations quickly. Timing is everything.

  7. Does both parties using dark money make it right??? Time to publicize this from the rooftops! Noem is clearly benefitting from dark money or she wouldn’t need to support this corruption! Time for her to retire on her unearned fat pension! I’m sure Paula Hawks can send her packing!

  8. Net Neutrality is DEMOCRACY! Huge win on Tuesday with court ruling treating internet as a utility, not a luxury. I am fearful of a Hillary Clinton position on net neutrality as some of her biggest donors are against Net Neutrality, i.e. democracy. No one has ever asked her campaign about this to my recollection.

  9. MegaDonors don’t care what average Americans think!

    Check out results of the Princeton Review results in this video:

    https://represent.us/action/theproblem-4/

  10. So Michael, what’s the IRS’s motivation to cut back on disclosure? Are they genuinely trying to protect donors from harassment, as your essay suggests? Are they trying to make peace with Congress? Are they just trying to scale back monitoring so they can focus their throttled resources on other audits?

  11. Cory:

    Sort of yes to all. The IRS has never apologized for the targeting scandal, and the GOP Congress continues to squeeze the IRS budget (except for technology) until someone is held accountable. The IRS has been sloppy in handling confidential nonprofit and donor information, and donors have been harassed. Most of the donor information on Schedule B of the 990 isn’t of any real use to the IRS, and data needed for enforcement can be gathered in other ways. Finally, under the legislation and under the rumored IRS regulations, donations from a nonprofit’s “insiders” would still need to be disclosed confidentially to the IRS on Schedule B.

    The division that deals with tax exempt entities (technically the Tax Exempt and Government Entities (TE/GE) Division) has been reorganized, and enforcement has been relocated to the division’s general counsel’s office. This implicitly raises the bar for enforcement, making enforcement a legal issue more than an administrative one.

    Lawyers cost more that administrators, and the legal standard for legal action is generally higher than the administrative standard, so fewer enforcement actions will likely occur. The changes to Schedule B (donor disclosure) helps reduce the enforcement overhead, just as the Form 1023-EZ for charitable registration eliminated the 60,000-application backlog for approval of tax-exempt status. [The Form 1023-EZ requires almost no documentation by a new charity – just the promise that they’ll do the right things for the right reasons. Much easier for the IRS to process.]

    I’m writing a feature story for NPQ today on a report an IRS panel presented to improve the nonprofit regulatory arm of the IRS. It will probably run tomorrow.