The IRS Can’t Force Charities to Surrender Donor Privacy for Tax-Exempt Status 

The Buckeye Institute v. Internal Revenue Service, et al. 

The government cannot force charitable organizations to hand over their donor’s names and addresses in exchange for a tax exemption—especially when the IRS itself admits it does not need this information. Yet, that’s exactly what the IRS requires of most nonprofit charities across America. 

CIR filed an amicus brief, joined by the New Civil Liberties Alliance and Hamilton Lincoln Law Institute, explaining why the IRS’s compelled disclosure of donor information violates the Constitution. It imposes an unconstitutional condition, meaning it grants a government benefit (tax-exempt status) only if the recipient of the benefit surrenders constitutional rights (the First Amendment rights of nonprofits and their supporters to freely and anonymously associate). Independently, because the disclosure requirement directly burdens the freedom of speech and association, it must, but cannot, meet the highest standard of constitutional review that applies. 

>> Read the full brief. 

The Problem 

For decades, Congress granted tax-exempt status to nonprofits without requiring disclosure of private donor information. In 1969, Congress introduced a reporting requirement broadly obligating most tax-exempt organizations to report their “substantial contributors” to the IRS. But the IRS eventually concluded these disclosures were not necessary for tax enforcement and carried significant risks, including accidental disclosure of sensitive donor information. As a result, the IRS eliminated the requirement for nearly all tax-exempt entities in 2020, but kept the disclosure rule in place for most 501(c)(3) charities. 

The result is an arbitrary and discriminatory regulatory patchwork: 

• Most nonprofits no longer must disclose donor information, because the IRS acknowledges it does not need this data for enforcement. 
• Most 501(c)(3) charities still do, even though they pose no unique risk of tax abuse and are legally prohibited from political activity. 

This double standard undermines core First Amendment protections and invites government abuse. 

Why the Disclosure Rule Is Unconstitutional 

CIR’s brief explains that the IRS’s selective donor-disclosure requirement violates the Constitution for two reasons. 

1. The IRS Disclosure Rule Imposes an Unconstitutional Condition. 

The unconstitutional-conditions doctrine forbids the government from conditioning a public benefit, like tax-exempt status, on surrendering constitutional rights. 

What the doctrine protects: 

The Supreme Court has long held that the government cannot indirectly pressure individuals or organizations to give up First Amendment freedoms that it could not directly take away. 

How the IRS violates this doctrine: 

Requiring 501(c)(3) organizations to disclose donors: 

• Does not define how tax-exempt funds may be used, unlike restrictions on lobbying or electioneering. 
• Is unrelated to the statutory limits on charitable activity. 
• Forces charities to choose between tax benefits and donor anonymity, a right the Supreme Court has repeatedly recognized as essential to free association. 

Because this disclosure requirement bears no relationship to the scope of the tax benefit Congress created, it represents precisely the kind of unconstitutional coercion the doctrine forbids. 

2. The Disclosure Rule Fails Strict Scrutiny. 

The rule is unconstitutional because it cannot survive judicial strict scrutiny, which is the proper standard of review for this requirement. 

Why strict scrutiny applies 

The rule directly burdens two intertwined First Amendment rights: 

• Freedom of association, including anonymous association  
• Freedom of speech, because associational privacy is a prerequisite for effective advocacy 

For decades, the Supreme Court has treated burdens on expressive association as fundamental and subject to strict scrutiny—the highest level of judicial review. 

Although some disclosure rules in campaign-finance law are reviewed under “exacting scrutiny,” that is a distinct and more permissive standard designed for a different context. 

Exacting scrutiny does not apply because of the nature of 501(c)(3) organizations. 

501(c)(3) organizations: 

• Cannot engage in political campaigns. 
• Do not create corruption risks. 
• Are already heavily regulated against partisan activity. 

Congress eliminated donor-disclosure rules for other nonprofits more likely to engage in political advocacy because the IRS did not need the information for tax enforcement. 

The Harm of Compelled Disclosures 

The dangers of compelled disclosure are not hypothetical: 

• More than a dozen IRS data breaches since 2004 have exposed sensitive donor data to the public.
• The Buckeye Institute itself was audited in 2013 immediately after opposing a major state policy initiative, causing donors to withdraw support or give anonymously out of fear of retaliation.  

This chilling effect is severe, well-documented, and exactly the kind of harm strict scrutiny is meant to prevent.  

Why This Case Matters 

This challenge concerns participation in public discourse without fear of government scrutiny or retaliation. 

If the rule stands, it would: 

• Allow the government to obtain donor lists from charities with no legitimate enforcement need. 
• Create a double standard where some nonprofits enjoy privacy while others do not. 
• Invite future administrations of either party to misuse sensitive donor information. 
• Chill charitable giving, especially to organizations that take positions disfavored by those in power. 

If the rule is struck down, it will: 

• Restore equal treatment across nonprofit categories. 
• Strengthen constitutional protections for anonymous association. 
• Reinforce limitations on government leverage over tax-exempt organizations. 
• Safeguard donors and civic participants across the political spectrum.