Consumer Federation of America, a nonprofit association of consumer organizations across the United States, is opposed to the proposed IRS rule to encourage nonprofit organizations to request the Social Security Numbers of donors who contribute more than $250 in order to be able to substantiate those gifts. In the consumer education work that CFA and our member organizations do, we warn that any requests for one’s Social Security number when it is not necessary is a red flag of fraud. Indeed, the IRS provides that advice itself. This proposal would make it harder for consumers to distinguish legitimate charitable requests from those that are not, while at the same time exposing this most sensitive type of personal information to theft and abuse from inside or outside of the organization. Many charitable organizations are simply unequipped to safeguard this information. Donors would be right to be very wary of any requests for their Social Security numbers even from charities that are legitimate because of concerns about identity theft. This wariness could have a negative impact on those organizations’ ability to raise funds.

The current contemporaneous written acknowledgement provides a means to substantiate gifts with minimum burden for donors or charitable organizations. There does not appear to be any compelling reason to institute this rule, and given the potential harm that it could cause, Consumer Federation of America urges the IRS to withdraw this proposal.