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Attorney General Gurbir Grewal. Photo by Kevin Sanders for the New Jersey Globe

Federal court sides with NJ, reinstates IRS donor disclosure law

Decision a ‘big win for democracy,’ Grewal says

By Nikita Biryukov, July 31 2019 10:15 am

A U.S. District Court Judge in Montana sided with the state and New Jersey, ruling that the IRS could not overturn a 50-year-old rule requiring certain dark money groups to disclose their major donors

“This decision is a big win for democracy and for the rule of law,” said Attorney General Gurbir Grewal. “Not only did the IRS try to make it easier for dark money groups to hide their funding sources, it did so behind closed doors, without seeking public input. By setting the IRS’s decision aside, the court has ensured that the IRS will be held accountable for its actions — and dark money groups can be held accountable for theirs.”

U.S. District Court Judge Brian Morris ruled the IRS’s policy change was unlawful because the agency attempted to change the rule without seeking public comment, which it is required to do by law.

Earlier this year, New Jersey lawmakers passed a law requiring 501(c)(4)s and some other types of political advocacy groups to disclose their donors.

The reinstated IRS rule requires 501(c)(4)s disclose a list of substantial contributors who gave a given organization more than $5,000 in assets in the prior year.

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