A coalition of conservative groups asked Congress on Thursday to investigate what it called "serious violations and evasions of the Internal Revenue Code" by the attorneys general of California and New York.
In a letter to House Oversight and Government Reform committee chairman Jason Chaffetz (R-Utah), an alliance of 104 advocacy and research groups said California Attorney General Kamala Harris and New York Attorney General Eric Schneiderman have been getting unauthorized access to records of nonprofit organizations.
The two attorneys general employed "state charitable solicitation licensing schemes" in order to gain access to their donor's names and addresses as well as information on how much each donor has contributed. The information comes from federal Schedule B forms, which the groups must file each year along with their federal tax returns.
The groups said Harris and Schneiderman have demanded nonprofits turn over the Schedule B forms "even though their state laws do not require them to acquire that confidential federal tax return information," and are doing so "in ways not authorized by the federal tax code."
In a copy of the letter provided to AMI Newswire, the groups also questioned whether the IRS, which oversees the regulation of nonprofit organizations' Schedule B forms, "was knowingly derelict in taking steps to prevent Harris and Schneiderman from evading federal tax return confidentiality laws."
The tax code allows state attorneys general only to obtain a nonprofit's Schedule B form "by requesting it from the IRS, which requests
the IRS may deny."
The groups allege the IRS "has taken no
visible steps to enforce its unique and exclusive authority to protect
confidential federal tax return information" from state officials.
Both Schneiderman and Harris have defended their actions in federal court, with varying results. Harris is leading a five-member field in this year's U.S. Senate race. Schneiderman is frequently mentioned as potential gubernatorial candidate.
In May 2014, Citizens United Foundation (CUF), one of the signers of the recent letter to Congress, sued Schneiderman, contending his office's request for the group's Schedule B form violated its First Amendment rights.
U.S. District Court Judge Sidney Stein ruled against Citizens United in July 2015, writing that the state's interest in requiring nonprofits to file Schedule Bs as part of the charitable registration process "clearly outweigh any burden" such a requirement may impose on the groups.
But in April, U.S. District Court Judge Manuel L. Real barred Harris from requiring Americans for Prosperity Foundation (AFPF) to file its Schedule B form with California.
In his opinion, Real pointed to testimony from AFPF donors who said they had been subjected to death threats due to their support of the organizations.
While none of the threats had led to violence, "this Court is not prepared to wait until an AFP opponent carries out one of the numerous death threats made against its members," Real wrote.
Harris is appealing Real's decision.