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IRS New Rules Terrify Charities [Picture]
New IRS rules are terrifying the nation’s charities. The new rules rerquire the charities to collect ocial security numbers and other sensitive personal information from donors, The charities fear donars may balk at supplying this information, and, from a security perspective, the charities lso wonder about what kind of security procedures they wil have to create to keep the information safe.
In late September, the Internal Revenue Service (IRS) proposed a new substantiation rule that would allow charities to self-report donations of more than $250. Under current rules, donors wishing to claim a charitable income tax deduction are required to obtain and submit a contemporaneous written acknowledgement (CWA) from the nonprofit receiving the donation. It’s a fairly straightforward system, but it places reporting responsibilities on the donor—if the donor loses the receipt or the charity fails to provide one, the claim won’t pass an IRS audit.
The new proposal aims to fix that issue, but there’s a catch: The reporting charity would be required to collect donors’ names, addresses and Social Security numbers. source
