Democrats make second attempt to overturn IRS rule that could encourage 'dark money'
Democrats are taking another crack at killing a 2018 Treasury Department rule that makes it so some 501(c) tax-exempt nonprofits — including politically active 501(c)(4) “dark money” groups — don’t need to disclose donor names and addresses in tax returns submitted to the IRS.
With every Democrat voting in favor, the Senate narrowly approved a resolution to overthrow the rule under the Congressional Review Act in December 2018, but the resolution did not get a vote in the GOP-held House.
The rule change was met with widespread outrage from campaign finance watchdogs that argue the new rules will encourage foreign individuals to contribute to politically-active nonprofits influencing U.S. elections.
Foreign nationals are prohibited from making federal contributions and politically-active groups cannot use foreign funds to influence elections. Though the IRS doesn’t directly enforce the foreign money ban, the FEC or Department of Justice (DOJ) could request an unredacted version of a politically-active nonprofit’s tax returns in order to assess whether it had received foreign money, said Brendan Fischer, director of federal reform at the Campaign Legal Center.