Last December, the Institute for Free Speech (IFS) sued the IRS on behalf of The Buckeye Institute, a state think tank based in Ohio. In the lawsuit, Buckeye v. IRS, IFS alleges the IRS is violating Buckeye’s First Amendment associational rights by mandating annual disclosure of its supporters and other contributors to nonprofit charities on the agency’s Schedule B form. Schedule B to Form 990 is an IRS document that Section 501(c)(3) charities must file that lists an organization’s significant donors. In an amicus brief organized by Advancing American Freedom Foundation (AAF), People United for Privacy Foundation (PUFPF) joined 70 nonprofit organizations in urging a U.S. district court to hear the case.

Unfortunately, The Buckeye Institute is intimately familiar with the chilling effects of donor disclosure mandates. In the complaint, Buckeye recounts being audited by the IRS soon after their successful advocacy against a push for Medicaid expansion in Ohio. The audit, which included a demand for the organization’s donor list, appeared to be blatant political retaliation for speaking out on a controversial policy issue. Buckeye ultimately rebuffed the demand for its donor list, but the threat still discouraged existing and potential donors from supporting Buckeye or other groups whose missions might incur the wrath of powerful government actors.

Central to Buckeye’s argument is the IRS’s admission that it does not even need or use nonprofit donor information to fulfill its oversight roles. In 2020, the IRS finalized privacy reforms that eliminated donor reporting requirements for most tax-exempt organizations after acknowledging that the agency did not use the information and that safeguarding such sensitive files was an unnecessary burden and vulnerable to leaks. The lawsuit asks the court to follow the logical conclusion of recent U.S. Supreme Court case law in Americans for Prosperity Foundation (AFPF) v. Bonta and the actions of the IRS itself to declare Schedule B donor disclosures a violation of the First Amendment.

The IRS failed in its attempt to dismiss the case. Now, the Institute for Free Speech has requested summary judgment for the court to review the case on its merits.

Importantly, IFS and Buckeye aren’t alone in their fight. In an amicus brief organized by AAF, 70 nonprofit organizations, including PUFPF, expressed their support for Buckeye’s challenge and the crucial need for donor privacy protections for nonprofits of all stripes. AAF is a 501(c)(3) nonprofit founded by former Vice President Mike Pence. In its amicus brief, AAF cites U.S. Supreme Court precedent in AFPF v. Bonta, declaring that California’s dragnet collection of nonprofit donor lists violated the First Amendment. Based on that precedent, AAF echoes IFS’s argument that the IRS’s mandatory reporting of Schedule B forms should be similarly invalidated. The brief quotes the IRS’s own words that the agency “does not need the names and addresses of substantial contributors to tax-exempt organizations . . . . in order to administer the internal revenue laws.”

Much like California’s mishandling of Schedule B forms, the IRS has proven incapable of securing this sensitive personal information. Just recently, an IRS contractor was charged with illegally leaking select individuals’ tax returns to the press. Rather than leave sensitive personal information vulnerable to rogue federal bureaucrats and contractors, Buckeye’s lawsuit aims to eliminate Schedule B reporting altogether.

PUFPF is proud to stand with Buckeye, the Institute for Free Speech, Advancing American Freedom Foundation, and dozens of nonprofit causes to urge the district court to protect the privacy of nonprofits and their supporters.