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Counting on Donations: IRS Proposal Could Change How Charities Collect Info

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A proposed change by the IRS could prompt some nonprofits to collect donor information for gift valued at more than $250. (DodgertonSkillhause/morguefile.com)
A proposed change by the IRS could prompt some nonprofits to collect donor information for gift valued at more than $250. (DodgertonSkillhause/morguefile.com)
 By Stephanie CarsonContact
December 28, 2015

RALEIGH, N.C. - The cleanup from the holiday is under way, and so is the clean-out of unwanted items that will make their way to nonprofits in North Carolina.

As the tax year comes to a close, folks are making last-minute donations to charities, but an Internal Revenue Service proposal could prompt some nonprofits in future years to collect the personal information of donors who give gifts valued at more than $250.

David Heinen, vice president for public policy and advocacy with the North Carolina Center for Nonprofits, says collecting personal information such as Social Security numbers could create a financial and temporal burden for organizations.

"It's going to create new work for nonprofits," says Heinen. "Create new costs and new liability by having to put in place new procedures to do this, and then the liability of maintaining those and the concerns about identity theft."

In addition to the cumbersome job of managing and protecting donor data, it could make it difficult for some nonprofits to secure board members, who are concerned over the liabilities involved.

As with any collection of your personal data, you will be made aware of its collection and use. Supporters of the proposal say it is needed because currently not all taxpayers file the proper paperwork for donations.

If put into place, the proposal would be optional for nonprofits to participate, but Heinen and others still are concerned about the ramifications.

"The concern is once a new procedure is initially put in as voluntary by the IRS, that at some point it becomes mandatory, or it is perceived as best practice for nonprofits, which it shouldn't be," says Heinen

The IRS received public comment until the 16 of this month. An announcement is soon expected about whether the proposal will be put in place as an option for nonprofits.

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