Lawsuit Wants IRS To Make All Tax-Exempt Groups Report Big Donors

The governor of Montana filed a lawsuit against the IRS on Tuesday over a rule change.

Earlier this month, the IRS said some tax-exempt organizations will no longer have to report the names and addresses of donors who give $5,000 or more each year. This means organizations from volunteer fire departments to the NRA will no longer have to turn over their donor lists.

Organizations are still expected to keep a list of substantial donors and make it available to the IRS, if requested. 

But in the lawsuit, Montana Gov. Steve Bullock says states use those donor lists to determine whether an organization is qualified to be tax-exempt. And without that information, he argues, states can't effectively enforce their local laws.

He also noted that many of the organizations no longer required to turn over donor lists are "dark money" groups that spend a lot of money on political campaigns.

Bullock says the IRS didn't follow the proper procedure to change the rule, and he wants the court to throw it out.