S. 4539: Protecting Charitable Giving Act

This bill, titled the Protecting Charitable Giving Act, seeks to amend the Internal Revenue Code with a focus on enhancing the privacy protections for contributors to certain tax-exempt organizations, particularly those classified under section 501(c)(3) and section 501(c)(4). Here’s a breakdown of the main points of the bill:

Increased Penalties for Unauthorized Disclosure

The bill proposes to impose stricter penalties for the unauthorized disclosure of tax return information related to contributors of specific tax-exempt organizations. Under the new provisions:

• The penalties for disclosing information from Form 990 Schedule B—specifically, information about contributors—will be increased from a maximum of $5,000 to a range of $10,000 to $250,000.
• These heightened penalties will act as a deterrent against the unauthorized dissemination of sensitive contributor information.

Legal Venue for Prosecution

The bill also outlines where legal action may be pursued regarding disclosures of this information:

• Prosecutions can be initiated in the judicial district where the victim resides, or in any other judicial district applicable by law.
• The term "victim" includes both the organization whose information was disclosed and any individual contributor affected by the disclosure.

Definition of Form 990 Schedule B Information

Form 990 Schedule B refers to specific tax return information that lists contributors to qualifying organizations. The bill clarifies that:

• This information includes personal details such as names and addresses of donors to organizations that are 501(c)(3) or 501(c)(4).

Audits and Reports on Unauthorized Disclosures

Further provisions require the issuance of audits and reports regarding such unauthorized disclosures:

• The amendments mandate that the IRS will issue reports on any disclosures of Form 990 Schedule B information.
• The reports should include audit results and recommendations for preventing future occurrences of similar disclosures while ensuring that sensitive information is appropriately redacted.

Effective Date

All amendments introduced by this bill will take effect for disclosures made after the legislation is enacted.

Relevant Companies

None found.