Friday, May 6, 2016
As has been covered in this space repeatedly (for example, with respect to Illinois and Maine), the combination of wealthy nonprofits, valuable real estate, and government budget pressures continues to lead to battles between those nonprofits and governments over property tax exemptions. New Jersey has become perhaps the most active battleground - NorthJersey.com reported last month that 26 of the state's 62 nonprofit hospitals are now embroiled in tax-court cases, building on a 2015 Tax Court of New Jersey ruling against Morristown Medical Center. While earlier this year New Jersey Governor Chris Christie announced an agreement to freeze property tax assessments for nonprofit hospitals for two years in order to give a to-be-formed Property Tax Exemption Study Commission time to review the issue, the legislature has yet to act on the legislation needed to implement this proposal. Additional coverage: NJ.com. The hospital battles join the ongoing lawsuit by individual residents of Princeton, N.J. against Princeton University that a state trial judge has refused to dismiss (a decision now upheld earlier this year by a state appellate court). For recent coverage of that suit, see Bloomberg and Fortune.
In related news, Gerard F. Anderson (John Hopkins) and Ge Bai (Washington & Lee) just published a study reporting that seven of the ten most profitable hospitals in the United States in 2013 were nonprofits. At the same time, they found more than half of the hospitals they studied (which included for-profit and public hospitals as well as nonprofits) incurred losses from patient care services and only 2.5 percent earned more than $2,475 per adjusted discharge. Here is the abstract for the study, which appears in HealthAffairs:
To identify the characteristics of the most profitable US hospitals, we examined the profitability of acute care hospitals in fiscal year 2013, measured as net income from patient care services per adjusted discharge. Based on Medicare Cost Reports and Final Rule Data, the median hospital lost $82 for each such discharge. Forty-five percent of hospitals were profitable, with 2.5 percent earning more than $2,475 per adjusted discharge. The ten most profitable hospitals, seven of which were nonprofit, each earned more than $163 million in total profits from patient care services. Hospitals with for-profit status, higher markups, system affiliation, or regional power, as well as those located in states with price regulation, tended to be more profitable than other hospitals. Hospitals that treated a higher proportion of Medicare patients, had higher expenditures per adjusted discharge, were located in counties with a high proportion of uninsured patients, or were located in states with a dominant insurer or greater health maintenance organization (HMO) penetration had lower profitability than hospitals that did not have these characteristics. These findings can inform policy reforms, while providing a baseline against which to measure the impact of any subsequent reforms.
Tuesday, May 3, 2016
Targeting Religious Organization Tax Benefits, Religious Orgs Pushing Back, and the Scandal of the Month
A flurry of litigation targets the tax benefits enjoyed by religious organizations and their ministers, including the parsonage allowance exclusion and property tax exemptions. At the same time, religious organizations are pushing back on government regulation by challenging the IRS enforcement of the political campaign intervention prohibition. And of course news outlets are continually searching for possible behavior by religious groups and sometimes finding it.
In the courts, the Freedom From Religion Foundation has refiled its complaint challenging on Establishment Clause and Due Process Clause grounds the parsonage allowance exclusion provided to ministers by Internal Revenue Code section 107. In an attempt to remedy the standing issue that doomed its earlier challenge, FFRF's new complaint asserts that it provides a housing allowance to its officers but solely because they are not ministers that allowance is subject to federal income tax. It remains to be seen whether these changed facts are sufficient to overcome the general prohibition on taxpayer standing, although the Seventh Circuit's earlier decision on this issue indicates they may be.
At the same time, the Massachusetts Supreme Court has taken up the question of what counts as sufficiently "religious" use of real property to qualify that property for tax exemption. Areas of the property at issue include a maintenance shed, a coffee shop, conference rooms, a religious bookstore, and part of a forest preserve. A recent Atlantic article (hat tip: Above the Law) details the possible significant ramifications of the case, both in Massachusetts and nationally, given the increasing financial pressure on local tax assessors to narrowly interpret property tax exemptions. Additional Coverage: WBUR.
Religious organizations are not solely on the defensive, however. The Alliance Defending Freedom, not satisfied with its increasingly popular Pulpit Freedom Sunday challenge to the Internal Revenue Code section 501(c)(3) prohibition's application to churches and other religious organizations, has now filed a Freedom of Information Act lawsuit to force the IRS to disclose its rules for investigating churches. ADF is basing its lawsuit on the disclosure by the IRS, in response to a FFRF lawsuit, that it was actively enforcing the prohibition as against churches. For a discussion of the bind ADF and FFRF are putting the IRS in, see this Surly Subgroup blogpost by Sam Brunson.
Finally, religious organizations continue to be fruitful sources for news outlets looking for scandals. Most recently, the City Church of New Orleans was the subject of a story by WWLTV detailing an ongoing state criminal investigation. The allegations against the church include both ones that are sadly familiar - financial mismanagement and use of church resources to benefit the private business interests of church leaders - and ones that are less common - lying to collect federal education grants and film tax credits. It remains to be seen, of course, whether these allegations are shown to be accurate or not.
Tuesday, February 23, 2016
This weekend, Ohio joined the group of states that have “defunded” Planned Parenthood. Ohio’s bill follows the model used by other states, and bans certain funding to go to any organization or affiliate that performs or promotes elective abortions. (Before the bill, there was no government funding of elective abortions.) “Affiliate” means any organization that shares common ownership or control, has a franchise agreement, or shares a trademark or brand name. Under this bill, an independently incorporated organization that, for example, licenses the Planned Parenthood logo would be precluded from participating in funding, even if it does not perform or promote elective abortions. Ohio’s restrictions apply to several specific programs, including the Violence Against Women Act and the Breast and Cervical Cancer Mortality Prevention Act.
Against my better judgment, I’m wading into these treacherous waters because these bills pose interesting legal and theoretical issues about the ability of government condition the receipt of funding to nonprofits based on disagreement with the organizations’ ideology.
Monday, February 22, 2016
If you've ever been involved in helping a charity comply with the various state solicitation registration requirements, then somewhere between swearing and tearing your hair out I'm sure you thought, "There has to be a better way!" Shake your fist at the sky in despair no more! It is with unbounded joy that I share part of a note I received from Bob Carlson of the Missouri Attorney's General Office, who has been actively involved for some time with NAAG and NASCO's efforts to develop a simplified filing process. And lo...
The Multistate Registration Filing Portal, Inc. has released our Request for Information (RFI) regarding a Single Internet Registration Portal. ... The RFI has been posted at http://mrfpinc.org/rfi/. We welcome all comments and look forward to robust response to the RFI. We also invite you to share it with anyone you believe may be interested.
The MRFP will host a conference call on March 15, 2016 from 3:00 p.m. – 4:30 p.m. EST to provide additional background information and answer questions from the public about the registration process. Dial-in: (800) 232-9745; PIN: 3232959. Charities, their registration services providers, and any other interested parties are welcome to participate. ...
The RFI will remain open until April 1, 2016.... Our one-page project summary is still available at http://mrfpinc.org/project-overview/
Seriously awesome work, Bob and everyone involved with this process. I am sure I speak for lots of folks when I say that we can't wait to see this become a reality!
Wednesday, February 3, 2016
Kadir Nagac (Zirve University, Department of Economics) has posted "Religiosity and Tax Compliance" to SSRN:
The intention of this paper is to analyze religiosity as a factor that potentially affects tax compliance. Studies in the 90s have shown that the puzzle of tax compliance is "why so many individuals pay their taxes" and not "why people evade taxes". It has been noted that compliance cannot be explained entirely by the level of enforcement (Graetz and Wilde, 1985; Efflers, 1991). Countries set the levels of audit and penalty so low that most individuals would evade taxes, if they were rational, because it is unlikely that cheaters will be caught and penalized. Nevertheless, a high degree of compliance is observed. Therefore, studies that analyze a variety of factors other than detection and punishment are need. Religiosity can play an important role in determining one's tax compliance decision. I use religious adherence data from the American Religious Data Archive and reported income data from IRS to analyze independent effects of church adherence rates on tax compliance in the United States at the county-level. Tax compliance at the county-level is measured as discrepancy in reported income between IRS data and census data. Existing studies focus on effect of religiosity on tax fraud acceptability (tax morale), not the actual tax fraud or tax compliance behavior. To writer's knowledge, this study is the first study that analyzes the effect of religiosity on actual tax compliance behavior.
(Hat tip: TaxProfBlog)
As published in the Daily Tax Report, at the ABA Tax Section meeting last week, Andrew Morton, a partner at Handler Thayer LLP, opined that a good number of "high-profile charitable foundations" need substantially more oversight and legal assistance than they are currently receiving. He clarified that the neglect of these organizations is not malicious or deliberate: "Not because they are deliberately trying to manipulate the system, not because they're trying to do anything wrong, they just don't know. They don't get that a nonprofit is a corporation … it's a real thing. You have to take care of it.” He explained that most of the problems that arise with such celebrity-affiliated foundations are due to a lack of written policies, such as conflict-of-interest and whistle-blower situations, and the lack of reporting those policies on the foundations' annual Forms 990. In addition, these foundations are typically not aware of charitable registration requirements, which are governed by the states: “501(c)(3) is an adjective—not a noun. You don't have a 501(c)(3). You have a state nonprofit corporation, which has been conferred tax-exempt status from the federal government,” he explained. “There are 51 jurisdictions that require compliance for nonprofits. The federal government has their requirements, but every state has a different landscape.”
Monday, November 9, 2015
According to Nonprofit Quarterly, Los Angeles County has adopted new beneficial rules regarding payments to nonprofits that contract with the government to provide services, such as social service agencies.
Anyone who has worked with charities that contract with the government (or anyone else, for that matter) knows that it is often very difficult for a charity to be reimbursed for the indirect costs associated with programming, such as utilities. At the end of last year, the Office of Management and Budget recently issued a "super circular" addressing indirect cost reimbursement, clarifying issues regarding the applicability of these rules to all federally-funded grants and contracts, and reiterinat that it is not appropriate for governmental agencies to request waivers of these rights.
Of course OMB directives can only govern grants and contracts using federal funds - clearly, all federal contracts, but also state and local contracts to the extent they utilize federal funding. Strictly state-funded (or local-funded) grants, however, are not covered by the OMB guidelines. Thus, LA County's adoption of the standards is a big deal for local nonprofits, and hopefully sets a trend for other state and local jurisdictions.
H/t to Jennifer Chandler at the National Council of Nonprofits, which has been active in this area.
Thursday, July 23, 2015
As reported by The New York Times, a charity fraud case in the New York court is a great teaching case reminiscent in part of United Cancer Council, except this case involves potentially both private benefit and private inurement. The National Children's Leukemia Foundation, based in Brooklyn, is accused of paying more than 80% of the $9.75 million it raised from 2009 to 2013 in telemarketing and direct-mail fundraising campaigns. In contrast, the Foundation only expended $57,451 in "direct cash assistance to leukemia patients" in the same time period. The Foundation's "Make A Dream Come True" program, which arranged family trips and celebrity introductions to children with cancer, was primarily a phantom effort, with only $7,866 paid out prior to 2009 and nothing thereafter. The Foundation's claims of maintaining a bone marrow registry and "banking stem cells" were admitted to be mostly false.
Reeking of private inurement, the Foundation was essentially a one-person operation, operated from the founder's basement. The founder extracted a $595,000 salary and $600,000 deferred compensation from 2009 to 2013, along with a future pension. The court petition also accuses the founder of using Foundation funds for personal expenses, including house renovations. A lack of board oversight and internal accounting controls appear to have contributed to the founder's ability to control both operations and raised funds. In addition, the Foundation transferred $655,000 to an Israeli research foundation created by the Foundation's founder.
Thursday, May 14, 2015
In an apparent pro-active effort to engage with a charitable nonprofit before it collapses, the Wall Street Journal and the NY Times report that Attorney General Eric T. Schneiderman has sent inquiries to board members of the Cooper Union for the Advance of Science and Art, asking about management of the college's endowment and transactions relating to the Chrysler Building, the land under which the college owns. The attention comes at least in part because of the college's decision in 2014 to begin charging undergraduate tuition, allegedly in order to avoid insolvency. The ongoing investigation has threatened the tenure of the college's president, although his position may already been at risk given apparent tensions between him and the board chairman. According to these various news reports, the potential issues center around possible financial mismanagement, including a failure to sufficient diversity investment holdings and questionable loan terms related to a new building, and lack of transparency, including with respect to regulators. Stay tuned.
Thursday, March 19, 2015
The Los Angeles Times reports that a proposed plan for a for-profit company to buy six struggling nonprofit hospitals has collapsed. As detailed in the article, the buyer, Prime Healthcare Services, is blaming California Attorney General Kamala Harris for imposing "impossible" conditions on the purchase, while the AG claims the buyer previously indicated it was fine with the conditions. Those conditions on the proposed $843 million sale included requiring the buyer to keep five of the hospitals open for at least 10 years, maintaining the same level of charity care as before the purchase, and apparently numerous other requirements described in a 78-page document. Regardless of whom is to blame, the Daughters of Charity Health System that owns the hospitals is now saying "[e]very option is on the table, including bankruptcy" given that the System is losing $10 million per month. Before the deal collapsed the System filed a lawsuit against a major union and a private equity firm for allegedly interfering in the sale agreement, according to the San Francisco Business Times.
As often reported here, an increasing number of states and localities are challenging the property and other tax exemptions of nonprofits within their jurisdictions. Some of the most notable recent developments have been in Maine, where the governor's budget proposal includes a tax on "large" nonprofit organizations in the state, and Pennsylvania, where a state constitutional amendment that would shift control over the standard for exemption to the state legislature is working its way through the amendment process. Along these lines, the Stateline news project of the Pew Charitable Trusts recently published a article titled "Should Nonprofits Have to Pay Taxes?" that provides an overview of recent developments in this area. Besides discussing the the situations in Maine and Pennsylvania, it also discusses developments in Ohio, Vermont, and New York, as well as providing a chart showing the number of federally tax-exempt nonprofits in each state and their assets. Of course those assets include both assets on which the owning nonprofit does pay tax (because no available exemption applies) and also assets that are not subject to property or similar state and local taxes regardless of what type of entity owns them (e.g., investment assets).
The Los Angeles Times has just published two articles highlighting the State of California Franchise Tax Board's decision to revoke the state tax exemption previously enjoyed by Blue Shield of California seven months ago, but to only announce the fact by including the huge health insurer's legal name (California Physicians Service) in a thousand plus page document on its website listing hundreds of organizations that had also lost their exemption. Here are links to the articles:
The articles report that the revocation came after a lengthy audit, and that Blue Shield is protesting the decision. On the line are tens of millions in state taxes annually. The articles also summarize past criticisms of Blue Shield with respect to executive compensation, multi-billion dollar reserves, increasing premiums, and an alleged failure to serve the state's poorest residents. Blue Shield for its part points to capping its profits at 2% of annual revenues, hundreds of millions give to its charitable foundation over the past decade, and hundreds of millions give back to customers and consumer groups in recent years. It also has reiterated its intention to remain a California mutual benefit nonprofit corporation.
Tuesday, August 5, 2014
Another Case Study in Private Inurement and Excess Benefit: Massachusettes IG Issues Report on Westfield State University Prez's Spending
From the Boston Globe, 31 July 2014:
Former Westfield State University president Evan S. Dobelle improperly used hundreds of thousands of dollars from school accounts to pay for such things as frequent personal trips, electronic equipment for personal use, and a portrait of himself, then covered his tracks by filing false reports, according to a scathing new report by the state inspector general. The report cited more than 20 examples of Dobelle’s misconduct during his stormy six-year tenure, many of them deliberate and repeated and some potentially illegal. In 2013, Inspector General Glenn A. Cunha writes, Dobelle brought friends and family on a university trip to Cuba, urging them to falsely claim to be Westfield State officials.
The full report, useful for teaching runaway private inurement, excess benefit and the failure of board oversight, is available here. Incidentally, Westfield State University is a public institution. Most public universities don't apply for recognition under IRC 501(c)(3); as a result, the prohibitions against private inurement and excess benefit are probably not applicable to the University. But the University's foundation, through which most of the spending occurred, is a private entity exempt under IRC 501(c)(3) and subject to the prohibitions. The Globe reports that the former President is suing just about everybody involved in his resulting ouster; he should probably get some good tax advice in a hurry.
Thursday, July 3, 2014
Nicholas Mirkay previously wrote in this space about the new California law that requires disclosure of donors and other information for nonprofits engaged in certain political communications in that state. New York also recently enacted new disclosure requirements for "independent expenditures" and then issued emergency regulations to implement these new rules that will impact nonprofits engaged in certain political communications in that state.
For purposes of the New York law, the range of communications that trigger disclosure is much broader than the federal definition of "express advocacy" or "electioneering communications". More specifically, those communications are defined as follows:
- Type of Communication: Audio or video communication via broadcast, cable, or satellite, written communication via advertisements, pamphlets, circulars, flayers, brochures, or letterheads, or other published statements (including paid Internet advertising), if the communication is conveyed to 500 or more members of a general public audience.
- Content of Communication: Either contains words such as "vote," "oppose," "support," "elect," "defeat," or "reject" that call for the election or defeat of a cleary identified candidate or refers to and advocates for or against a clearly identified candidate or ballot propoal; whether a communication advocates for or against is based on an all relevant facts and circumstances test.
- Timing of Communication: Anytime for communications that contains the express advocacy words; on or after January 1 of the election year for other communications that advocate for or against.
All groups covered by these rules, including nonprofits, must register before making any independent expenditures and then must file reports disclosing both expenditure details and identifying information for any person providing a contribution of $1,000 or more.
In related news, according to a Politico report Citizens United recently announced it plans to sue the New York Attorney General over his issuance of earlier regulations imposing new disclosure requirements on nonprofits engaged in election-related spending. It is not clear if the lawsuit will be expanded to also encompass the recently enacted disclosure rules.
Tuesday, July 1, 2014
CNN reports that Quadriga Art, a for-profit charity fundraising company, has resolved an investigation by the New York Attorney General's office by agreeing to pay almost $10 million in damages and to forgive another almost $14 million in debt owed to the company. Nick Mirkay previously posted in this space on the still ongoing congressional investigation into this situation.
The CNN report states the focus of the investigation and settlement was the relationship between Quadriga and the Disabled Veterans National Foundation, a charity that Quadriga Art apparently helped set up in 2007 by fronting the charity's initial printing, mailing, and other fundraising costs. The relationship eventually led to the charity raising $116 million, but paying $104 million of that amount to Quadriga and owing Quadriga the debt forgiven in the settlement. As part of the settlement the Foundation also agreed to take a number of steps, including having its founding board members resign, creating a committee to reexamine its business model, and refraining from using Quadriga or a particular direct marketing company for three years.
Thursday, May 29, 2014
As reported in Sunday's The New York Times, a trend among hospitals around the country is to reduce financial assistance to uninsured patients with the intent of forcing such patients to obtain coverage under the Affordable Care Act. The criticism is obvious - uninsured lower- and middle-income citizens without coverage will not take advantage of the ACA due to perceived, and perhaps actual, unaffordability and therefore forgoe health care all together. The push-and-pull for hospitals centers on the ACA's reduction of federal payments to hospitals that treat large number of uninsured patients (again, hoping to force such patients to seek coverage in online marketplaces) and the actual need to provide free or reduced-cost health care to those most in need of it.
The Times article illustrates hospitals' various policies to address this real problem:
In St. Louis, Barnes-Jewish Hospital has started charging co-payments to uninsured patients, no matter how poor they are. The Southern New Hampshire Medical Center in Nashua no longer provides free care for most uninsured patients who are above the federal poverty line — $11,670 for an individual. And in Burlington, Vt., Fletcher Allen Health Care has reduced financial aid for uninsured patients who earn between twice and four times the poverty level.
Continuing charity care for the uninsured, argues some health care providers, defeats the very purpose of the ACA. However, uninsured advocates argue that many uninsureds forgoe coverage under the ACA inaugural enrollment because the plans are expensive, even with government subsidies. Some argue that it is still a matter of message - encouraging people who now have access to coverage under the ACA to take advantage of the opportunity.
The article further states:
Many hospitals appear focused on reducing aid only for patients who earn between 200 percent and 400 percent of the poverty level, or between $23,340 and $46,680 for an individual. Many of those people presumably have jobs and would qualify for subsidized coverage under the new law.
The Times further reported that financial challenges for uninsureds are "particularly daunting" in the states that have not yet expanded their Medicaid programs, which currently totals over 24 states.
An issue not addressed by the Times Article is how these emerging charity care policies, to best comply with and take advantage of the new ACA reimbursement rules, will affect these tax-exempt hospitals' Form 990 Schedule H reporting? Has Congress and the IRS contemplated the changes to charity care numbers in light of the above-referenced ACA rules?
Friday, May 9, 2014
The National Association of State Charity Officials has submitted comments to the Treasury Department objecting to the proposed IRS Form 1023-EZ. The form would permit certain types of nonprofits with relatively low expected annual revenues and total assets to submit a streamlined application for recognition of exemption under IRC § 501(c)(3). NASCO reiterated concerns expressed in the 2012 Report of Recommendations by the Advisory Committee on Tax Exempt and Government Entities (ACT), in which ACT recommended against the development of such form because it viewed any benefits from doing so as being "outweighed by the loss of educational value to the applying organization and the loss of effectiveness to the IRS."
Friday, April 25, 2014
According to an Associated Press report, the New York Attorney General's Office intends to appeal a decision by a New York trial court that the $199,000 salary cap imposed by executives at nonprofit contractors with the Health Department by executive order exceeded the Governor's authority. Further coverage of the court decision in Agencies for Children's Therapy Services v. New York Dept. of Health can be found at the New York Nonoprofit Press. That article notes that another trial court ruled in favor of New York and upheld the salary cap, so the matter will ultimately need to be resolved by a higher court. It also notes that the salary cap also applies to nonprofits that contract with 12 other agencies.
Wednesday, April 23, 2014
“Crowdfunding” appears to be all the rage. Investopedia defines crowdfunding on the most basic level as the “use of small amounts of capital from a large number of individuals to finance a new business venture.” In the earliest days, crowdfunding was basically a plea for money – see the artistic ventures funded primarily through Kickstarter. The problem with that model, of course, is that one could not get equity in return for your contribution – after all, that starts to look an awful lot like a securities offering, and the SEC has issues with that. The Jumpstart Our Business Startups (or, pithily, JOBS) Act of 2012 was designed in part to loosen the securities regulations on small business, so that there will be greater flexibility in the ability to offer equity in return for contributions through crowdfunding (or at least there will be when the SEC gets around to issuing regulations on the matter.)
Crowdrise.com (note: it’s a for-profit site) allows you to “create a fundraiser” for your event. It appears that it isn’t limited to charities, although the site links to Guidestar.org in order to filter the bona fide Section 501(c)(3)s from the merely well-intentioned. There seems to be a lot of fundraising teams for fun runs and the like, as well as fundraisers for sick individuals and medical expenses. Some of these might qualify for a Section 170 deduction if given directly to the organization; other, such as the fundraisers for medical expenses, wouldn’t qualify for a deduction, no matter how well intentioned. Crowdrise does state:
Your donation to a US-Based 501(c)3 charitable organization through CrowdRise is 100% tax deductible to the extent allowed by law. We will email you a receipt that meets all IRS requirements for a record of your donation. If you are asked to provide a paper receipt for IRS purposes, please print out a copy of your email receipt. If you lose your receipt, email firstname.lastname@example.org and we'll send you a duplicate. Be sure to include your first and last name and the email address you used to make the donation. Donations to indviduals [sic] are not tax-deductible.
Crowdrise receives a transaction fee for each contribution made, which varies depending on the manner in which the transaction is consummated.
From a regulatory stand point, should we worry about this? In the for-profit world, we have the SEC and its state law counterparts. The IRS won’t (and shouldn’t) get involved, it seems to me, unless we are worried about charitable deduction issues. That being said, is this high tech direct mail, and should it be regulated as such? Take, for example, the Illinois Solicitation for Charity Act, which defines a professional fund raiser as one who receives “compensation or other consideration… on behalf of a charitable organization residing within this State for the purposes of soliciting, receiving or collecting contributions…”
Or is Crowdrise just an intermediary – it makes no legal representations that what is does is charitable or tax-deductible, necessarily. I’d be curious to know how state regulators are approaching sites like Crowdrise from a solicitation regulation stand point, and how the Charleston principles would apply to such a website?
Tuesday, April 22, 2014
A tax-exempt nonprofit that solicit contributions in California is challenging a demand from the California Attorney General's office that they provide unredacted copies of their IRS Form 990 Schedule B, which lists major donors. As most readers of this blog likely know, while Schedule B is submitted to the IRS the IRS is required to keep the names and other identifying information of the donors listed confidential. Similarly, while tax-exempt organizations are generally required to provide copies of their Forms 990 upon request, they can redact this donor identifying information before they do so. The organization that is challenging the demand is the section 501(c)(3) Center for Competitive Politics, which has filed a lawsuit in federal district court as detailed at the link above.
In a separate challenge to compelled disclosure of donors, according to a Washington Examiner article the section 501(c)(4) Campaign for Liberty, which is associated with Ron Paul, is challenging the ability of the IRS to require disclosure of donor information on Schedule B even if that information is not (supposed to be) disclosed publicly. While not completely clear from the article, it appears that the group is refusing to provide the required information and refusing to pay any fines imposed by the IRS as a result, presumably for filing an incomplete Form 990. These two challenges join an earlier challenge by the Tea Party Leadership Fund, a PAC and therefore presumably a section 527 tax-exempt organization, to donor disclosure required by the Federal Election Commission, as reported by NPR.