Trump Treasury nominee defends guidance reducing donor disclosure

President Trump’s nominee to be deputy Treasury secretary on Thursday defended recent guidance from the agency that reduces donor reporting requirements for certain tax-exempt groups, saying that the guidance was designed to make tax administration more efficient.

“Unfortunately, I believe it’s become very politicized over the last few weeks, but the intent was to further efficient tax administration,” Justin Muzinich said at his confirmation hearing, held by the Senate Finance Committee.

{mosads}Muzinich added that the policy change was “an action also recommended by the IRS commissioner under President Obama.”

Treasury and the IRS last week issued guidance that ends a requirement for certain tax-exempt organizations — including issue-advocacy groups, labor groups and chambers of commerce — to provide the IRS with the names and addresses of significant donors on annual forms.

Republicans have praised the guidance, arguing that it will help prevent the IRS from targeting taxpayers for their political beliefs. But Democrats have blasted the policy change, arguing that it will make it easier for foreign governments to influence U.S. politics.

Last week, every Democrat on the Finance Committee voted against Trump’s nominee to be IRS commissioner in order to express their opposition to the guidance. During Thursday’s hearing, Democrats continued to express their disapproval of the guidance.

“What this action has done is essentially blindfold intelligence officials and law-enforcement folks who want to combat foreign-election interference,” said Sen. Ron Wyden (Ore.), the top Democrat on the Finance Committee.

But Sen. Pat Toomey (R-Pa.) said that there’s no reason for the IRS to have the information about the donors’ identities to enforce the tax code, though he noted it could be appropriate for other federal agencies to look into the possibility of “a suspicious series of transactions.”

Toomey noted that contributions to the groups that no longer have to disclose their donors’ identities are not tax deductible for the donors.

“Since the mission of the IRS is to determine what people owe in taxes, and since these contributions have nothing to do with what people owe in taxes, it’s really not the business of the IRS to be trying to police who contributed what to these organizations,” he said.

Since early last year, Muzinich has been serving as a counselor to Treasury Secretary Steven Mnuchin. He was involved in the administration’s work on the major tax law Trump signed last year.

Muzinich said he was “not a decision maker” on the donor guidance, since he focuses on tax reform and implementation, but that the guidance was discussed in meetings where he was present.