The Internal Revenue Service is warning charities that they should not include Social Security numbers on the annual public tax documents they are required to file with the tax agency.
The warning follows a new report that found that nearly one in five nonprofits has published private Social Security numbers of supporters and employees on informational tax forms, known as Form 990s, filed from 2001 to 2006.
“Because the law doesn’t allow the IRS to redact Social Security numbers when we make 990s public, it’s important for organizations, preparers, and you to make sure this kind of information isn’t put on the form, which creates a risk of identity theft,” said Lois Lerner, director of the IRS division that oversees charities, in a speech in April at Georgetown University Law School.
The IRS has issued similar warnings through e-mails and on its Web site.
A Review of Tax Returns
Identity Finder, a company that specializes in security and privacy software, recently reviewed more than 3 million tax returns filed from 2001 to 2006 and found that more than 132,000 charities had published at least one Social Security number on their tax forms.
Most were those of donors, trustees, employees, directors, and scholarship recipients. Slightly more than a third were those of the individuals who prepared the documents, the study found.
The disclosures have been made by some of the nation’s largest charities. A Chronicle review of the tax forms of the 12 top groups on its Philanthropy 400 ranking of charities that raise the most from private sources found three organizations that published the Social Security numbers of at least one individual: Food for the Poor, Schwab Charitable Fund, and the Task Force for Global Health.
Schwab Charitable released the Social Security numbers of six tax preparers, while Food for the Poor and the Task Force for Global Health each included the number of one tax preparer, those organizations told the Chronicle.
Liability for Charities
Grayson Barber, an advocate for privacy issues, says charities should exercise extreme care in protecting personal information about employees and supporters, in part because they could be liable if that information gets into the wrong hands.
“Having access to confidential information like Social Security numbers imposes obligations on all corporations, including charitable organizations, to protect sensitive personal information,” Ms. Barber says.
The IRS does not require organizations to include Social Security numbers on the Form 990. Tax preparers are required to provide their personal tax-identification numbers in the form’s signature block.
Identity Finder advises nonprofits to warn those whose Social Security numbers have been published that they might be at increased risk for identity fraud.