July 23, 2018

U.S. Treasury Department Protects Associations’ Free Speech Rights

Last Monday, the U.S. Treasury Department announced a significant policy change that eliminates the requirement for trade associations to file personally identifiable information about members and contributors. Up until last week’s ruling, trade associations had been required to disclose the names and addresses of their contributors each year on their Internal Revenue Service (IRS) forms.

This new policy will strengthen the privacy of associations’ members by reducing the risk of inadvertent disclosure or misuse of confidential information. While there is pending legislation in Congress to codify this new policy, the Treasury Department’s action upholds the rights of individuals and companies to advocate through voluntary association – and to do so anonymously, consistent with prior Supreme Court rulings.

This change impacts trade associations that are organized as a 501(c)6, but does not change requirements for 501(c)3 or 527 organizations. Associations will still be required to collect and keep this information in their records, and to make it available to the IRS only upon request, when needed for tax administration. In its rule, the Treasury Department also clarified that “information that was previously open to public inspection will continue to be reported and open to public inspection.”