Why the IRS put the kibosh on this meddling charity rule

Late last year, the Internal Revenue Service proposed an addition to a charity regulation called the Paperwork Reduction Act that wanted to do the exact opposite of what you might expect a charity regulation called the Paperwork Reduction Act would do: create more paperwork for charities.

For taxpayers making donations to their favorite charity, the proposed rule could have eliminated the need to send the IRS a receipt proving any donation was made. That reporting responsibility could have shifted instead to the organization receiving the donation.

To be clear, the rule would have made this switch optional, not mandatory (though some feared it could quickly become as much). Doesn’t sound all that awful, right?

Consider this: The IRS was not only asking nonprofits to voluntarily take on more paperwork, but to harbor private donor information — you know, as in social security numbers — subjecting donors to identity theft.

The IRS pulled the proposal off the table late last week after an outpouring of pushback from both diehard privacy advocates and seething charities alike. Plus, as the IRS noted in their proposal, the existing system already “works effectively, with minimal burden on donors and donees.”

By the way, as it just so happens, the IRS wasn’t even all that serious about the proposed rule, anyway. They’ve been authorized to make it happen for two decades and haven’t.