IRS nixes controversial plan to collect Social Security numbers of charity donors

A wave of complaints forced the IRS on Thursday to withdraw its controversial plan to have nonprofit charities report the Social Security numbers of donors who give just $250 in any given year. 
Under the proposed rule, the IRS would have created a voluntary system for nonprofits to collect and send the IRS personal donor information in their yearly report. The idea was to simplify the process for nonprofits – ranging from traditional charities to churches – and donors alike.
But lawmakers and nonprofits cried foul, and warned even a voluntary program could scare off donors who don’t want to give out their Social Security numbers. Plus there were concerns that nonprofits would need to beef up data security to protect the information from hackers.
A new IRS notice to be published in the Federal Register says that, in the wake of these complaints, the proposal is being pulled.
“The Treasury Department and the IRS received a substantial number of public comments in response to the notice of proposed rulemaking,” the notice said. “Many of these public comments questioned the need for donee reporting, and many comments expressed significant concerns about donee organizations collecting and maintaining taxpayer identification numbers. … Accordingly, the notice of proposed rulemaking is being withdrawn.”
An IRS official confirmed to FoxNews.com that the plan was withdrawn in reaction to the public comments.
The relationship between certain nonprofits and the IRS already suffers from trust issues in the wake of the controversy over officials subjecting conservative groups to additional scrutiny – and data breaches. The reporting proposal revived some of that tension.
“There's a big caution here. There's a big yellow light that should be flashing,” Illinois Republican Rep. Peter Roskam told Fox News last month. “… Number one, the IRS has not demonstrated its capacity to hold this type of information from confidentiality and a security point of view.”
Tea Party Patriots, which had opposed the rule, cheered the latest decision on Thursday.
“This is a huge victory for American democracy, the First Amendment and our grassroots supporters. President Obama’s IRS is abandoning its blatantly heavy-handed regulation to ask charities to disclose the Social Security numbers of donors giving $250 or more annually,” TPP President Jenny Beth Martin said in a statement.
The IRS earlier described some of the pushback as “misimpressions and inaccuracies.”
The agency said the change was proposed in September in part because some taxpayers who were being audited said they lost their donation records – and if charities had a record, it would help them verify deductions.
“[S]ome … organizations and donors were interested in using this option,” the agency said. “This proposal would impose no mandatory changes to existing rules.”
Some were concerned, though, that the voluntary option could eventually become mandatory.
As it stands, nonprofits are required to send any contributor of $250 or more a “contemporaneous written acknowledgement (CWA)” that includes the amount of the donation and any services or gifts received in return. This document is used by the donor when filing for deductions from income taxes.
The proposed rule would have allowed nonprofits to send all that information – along with Social Security numbers – directly to the IRS on a single form.

Eligibility questions causing headaches for Cruz camp, as McCain piles on

A casual jab by Donald Trump over Canada-born Ted Cruz’ eligibility for president has snowballed into a campaign trail headache for the Iowa GOP caucus front-runner.
The Texas senator was born in Calgary, Canada, a fact he’s hardly kept secret. Despite some questions last year about his eligibility to run, legal scholars have said Cruz indeed is a “natural born citizen” and eligible because his mother is American. Plus he renounced his Canadian citizenship in 2014.
But Trump, who famously challenged President Obama’s birthplace and eligibility years ago, dredged up the same issue with Cruz earlier this week, warning it could lead to a drawn-out court case.
Cruz tried to brush it off. But other lawmakers – most recently, Sen. John McCain, R-Ariz., and House Minority Leader Nancy Pelosi, D-Calif. – have kept the questions alive.
McCain, who is not exactly a Cruz ally, needled his Senate colleague in a radio interview with Phoenix-based KFYI. He said Cruz’ case is different from his own situation – McCain was born on a U.S. military base in the Panama Canal Zone.
“I think there is a question. I am not a constitutional scholar on that, but I think it’s worth looking into. I don't think it's illegitimate to look into it," McCain said.
Pelosi, asked about Cruz on Thursday, said it’s a matter for Republicans to decide but added: “I do think there is a distinction between John McCain being born to a family and serving our country in Panama than someone born in another country.”
Following McCain’s interview, Trump tweeted:
The Cruz campaign hit back at McCain Thursday, with communications director Rick Tyler suggesting the senator is just trying to boost Florida Sen. Marco Rubio.
“I imagine that the Gang of Eight will stay together and he’ll be for Rubio, so … why not help?” he told Fox News, referencing the 2013 “gang” that worked on an immigration reform bill.
Pro-Cruz super PAC Keep the Promise 1 also said in a statement: "As Cruz rises in the polls, his opponents are looking for anything to stop his momentum. Raising a matter of law shows there is nothing else to attack him on, and that he's gotten into their heads. Let's end these sideshows and get back to talking about who is going to restore peace and prosperity to our nation."
Whether the Canada questions fade or flare from here is an open question.
Trump has claimed he was only posing an “innocent question” when he first discussed Cruz’ eligibility in an interview with The Washington Post. But he’s urged Cruz to get out in front.
“I will say, though, that the Democrats, if they bring a lawsuit on it … you have to get it solved,” Trump told Fox News on Wednesday. “I would like to see Ted do something where maybe he goes in a preemptive fashion into court to try and get some kind of an order because I would not like to see that happen.”
Cruz has tried to stay above the fray.
He initially responded to Trump’s questions with a tweet referencing the episode of “Happy Days” where Fonzie jumps over a shark on water skis, equating it to the Trump campaign “jumping the shark.”
But he was peppered with questions at a press conference Tuesday in Iowa. He wouldn’t criticize Trump directly and tried to turn the tables on the media.
“One of the things the media loves to do is gaze at their navels at hours on end by a tweet from Donald Trump or from me or from anybody else—who cares? Let’s focus on the issues.”
He added, “The best way to respond to this kind of attack is to laugh it off.”
In the past, Cruz supporters have pointed to an article last year in the Harvard Law Review by Neal Katyal, former acting solicitor general in the Obama administration, and Paul Clemente, former solicitor general in the George W. Bush administration.
“There is no question that Senator Cruz has been a citizen from birth and is thus a ‘natural born Citizen’ within the meaning of the Constitution,” they wrote.  
The lawyers wrote that the Supreme Court has long used British common law and enactments of the First Congress for guidance on defining a “natural born citizen.”
“Both confirm that the original meaning of the phrase ‘natural born Citizen’ includes persons born abroad who are citizens from birth based on the citizenship of a parent,” they wrote.
For Cruz, the questions might not have gained much steam if not for the fact that Obama and his allies spent years battling allegations from “birthers” that he wasn’t really born in Hawaii.
White House Press Secretary Josh Earnest invoked that controversy on Wednesday.
“It would be quite ironic if after seven or eight years of drama around the president’s birth certificate, if Republican primary voters were to choose Senator Cruz as their nominee -- somebody who actually wasn’t born in the United States and only 18 months ago renounced his Canadian citizenship,” Earnest said.
GOP candidate and Kentucky Sen. Rand Paul also piled on Wednesday, joking on Fox News Radio’s “Kilmeade & Friends” that, “I think without question he is qualified and would make the cut to be Prime Minister of Canada.”
He later said, “I am not enough of a legal scholar to say the court will decide one way or another.”

Latest batch of Clinton emails contains 66 more classified messages

The latest batch of emails released from Hillary Clinton's personal account from her tenure as secretary of state includes 66 messages deemed classified at some level, the State Department said early Friday. 
All but one of the 66 classified emails have been labeled "confidential", the lowest level of classification. The remaining email has been labeled as "secret." The total number of classified documents found on Clinton's personal server has risen to 1,340 with the latest release. Seven of those emails have been labeled "secret."
In all, the State Department released 1,262 messages in the early morning hours, making up almost 2,900 pages of emails. Unlike in previous releases, none of the messages were searchable in the department's online reading room by subject, sender or recipient.
Clinton, the front-runner for the Democratic presidential nomination, has repeatedly maintained that she did not send or receive classified material on her personal account. The State Department claims none of the emails now marked classified were labled as much at the time they were sent.
However, one email chain from June 2011 appears to include Clinton giving advice to her top adviser Jake Sullivan about how to send secure information through insecure means.
In response to Clinton's request for a set of since-redacted talking points, Sullivan says, "They say they've had issues sending secure fax. They're working on it." Clinton responds "If they can't, turn into nonpaper [with] no identifying heading and send nonsecure."
Another message includes a condolence email from the father of U.S. Army Sgt. Bowe Bergdahl following the 2012 attack on the U.S. Consulate in Benghazi, Libya.
The note from Bob Bergdahl, which was forwarded to Clinton by  Sullivan, reads in part, "Our Nation is stumbling through a very volatile world. The 'Crusade' paradigm will never be forgotten in this part of the world and we force our Diplomats to carry a lot of baggage around while walking on eggshells."
After seeing the email, Clinton directed her assistant Robert Russo to "pls [sic] prepare [a] response." Bowe Bergdahl was freed from Taliban capitivity in May 2014 as part of a prisoner swap. He faces a court-martial for desertion in August.
The State Department made the emails public after failing to meet a court-ordered goal of releasing 82 percent of the 55,000 pages of emails Clinton turned over to the department last year. State Department spokesman John Kirby said Thursday the latest release would bring the department in line with that goal.
The messages had previously been released in batches at the end of each month. A federal judge has ordered that the email release be completed by Jan. 29.
The latest document drop came one day after the State Department was criticized by its independent inspector general for producing "inaccurate and incomplete" responses to public records requests during Clinton's time as secretary of state.
The report underscored inherent problems for public responses to records requests when government employees use a private email account, as Clinton did.
The federal public records law "neither authorizes nor requires agencies to search for federal records in personal email accounts maintained on private servers or through commercial providers" such as Gmail or Yahoo, the report stated. "Furthermore, the [Freedom of Information Act] analyst has no way to independently locate federal records from such accounts unless employees take steps to preserve official emails in department record-keeping systems."

China Stock Market Cartoon

Congress sends health law repeal to Obama's desk for first time

Congress sent an ObamaCare repeal bill to the president’s desk for the first time on Wednesday, marking an election-year victory of sorts for Republicans who have tried since 2010 to scrap the law.
The bill repealing most of President Obama's signature health care law was approved in a final 240-181 House vote Wednesday afternoon, after clearing the Senate late last year. The legislation also would strip federal funding for Planned Parenthood.
The measure still faces certain doom at the White House, and Democrats derided the vote Wednesday as pointless. The president is sure to veto, and Republicans do not have the votes to override.
But the political theater marks the opening volley in a fresh ObamaCare fight under the Paul Ryan-led House, and one likely to energize the party’s election-year efforts.
“I fully anticipate the president will veto this, but I mean, how many times have we been saying we want to put bills on his desk that say who we are, what we believe versus what he believes, and that he will veto,” Speaker Ryan, R-Wis., told Fox News Tuesday night before the vote.
The new speaker’s next goal is to engineer and pass a bill – also for the first time – to replace the Affordable Care Act. Doing so could help Republicans respond to Democrats’ allegations that they have no viable alternative.
Ryan is tempering expectations for the GOP in this exercise.
In a recent meeting with reporters, the speaker indicated that the House was practically obligated to pass a health care reform replacement bill. He was confident the House could do so this year but underscored that he didn’t say the president would sign the legislation into law.
But this is still part of Ryan’s effort to contrast Republicans’ plans with the Obama agenda. Democrats have long hectored Republicans for failing to cough up a bill to replace the current health care law even as they try to repeal it. If they at least draft a bill, and even pass it, then the parties can argue over a concrete policy choice.
“We need to win the election, and the best way to win the election is give people a choice,” Ryan told Fox News, speaking generally about the two parties’ platforms.
Republicans have held more than 60 votes so far to repeal all or part of the health care law.
They only cleared this one past the Senate because they used a special set of budget rules known as “reconciliation.” This allowed the measure to pass with a simple majority – typically, Republicans would have needed to muster 60 votes to pass it.
Planned Parenthood has come under attack since videos surfaced last year of graphic discussions about harvesting fetal tissue.
Wednesday's vote, meanwhile, provided fresh fodder for the Democratic presidential candidates. Hillary Clinton warned in Iowa earlier this week that the vote shows the high stakes at play in the 2016 race. She, too, accused Republicans of offering no alternative.
“They have no plan. The Republicans just want to undo what Democrats have fought for decades and what President Obama got accomplished,” she said.

Joe Biden on 2016 decision: 'I regret it every day'

WASHINGTON –  Vice President Joe Biden says he regrets not running for president "every day" but that he made the right decision for himself and his family.
Biden tells television station WVIT in Connecticut that he plans to stay "deeply involved" in the campaign.
Biden seriously considered running but decided in October that he had waited too long. His 46-year-old son died last May.
The vice president says the Democratic primary has been a robust debate between Hillary Clinton and Bernie Sanders devoid of personal attacks.
But he says the Republican primary hasn't been very illuminating.
Biden is calling out Ted Cruz and Donald Trump for comments made on the campaign trail. He says three of the Republican presidential candidates have told him "it's absolutely crazy."

Clinton's private email account exploits FOIA loophole, report says

EXCLUSIVE: Hillary Clinton’s unorthodox use of a private email account and personal server for government business exploited a loophole in the State Department's FOIA, or Freedom of Information Act, process, according to the findings of the first Inspector General report to stem from her email scandal. 
Congress asked the Office of Inspector General, the State Department's independent watchdog, to investigate the issue following the revelation that Mrs. Clinton did not use a government email account while secretary of state.
Fox News reviewed the 25-page report and its findings before they were made publicly available.
The report reads in part:
"FOIA neither authorizes nor requires agencies to search for Federal records in personal email accounts maintained on private servers or through commercial providers (for example Gmail, Yahoo, and Hotmail.)  Furthermore, the FOIA Analyst has no way to independently locate Federal records from such accounts unless employees take steps to preserve official emails in Department record keeping systems.”
The report strongly suggests that it relies on employees at all levels to follow the regulations, and when personal email is used, to forward copies to a State Department account so that it can be captured.
"Under current law and Department policy, employees who use personal email to conduct official business are required to forward or copy email from a personal account to their respective Department accounts within 20 Days.”
Clinton did not have a State Department email address to which she could forward message traffic from her personal account, and it remains unclear whether she provided all her State Department business emails to the State Department or federal courts, where FOIA lawsuits have been filed.
The report also found that the State Department wait time for Freedom of Information Act Requests far exceeds that of other departments. For example, FOIA requires agencies to respond to requests within 20 working days, and "some requests involving the Office of the Secretary have taken more than 500 days to process."
The State Department is also criticized for practices that "do not consistently meet statutory and regulatory requirements for completeness and rarely meet requirements for timeliness."
Given Clinton's use of a private account, where more than 1,000 classified emails have been identified, including at least two at the Top Secret level, it appeared ironic that the report states employees had not been reminded of their FOIA responsibilities "...since March 2009, when former Secretary Clinton sent a message commemorating Freedom of Information Day."
The OIG report makes four recommendations, including that the Office of the Secretary should fully comply with FOIA requirements. The department said it agreed with the recommendations and changes had been made.
State Department spokesperson John Kirby said in response late Wednesday, ‎”The Department is committed to transparency, and the issues addressed in this report have the full attention of Secretary Kerry and the Department’s senior staff. While the volume of State Freedom of Information Act requests has tripled since 2008, our resources to respond have not kept pace.
“That said, we know we must continue to improve our FOIA responsiveness and are taking additional steps to do so. That’s why Secretary Kerry asked the State Inspector General to undertake this review in March, and it’s why he appointed a Transparency Coordinator this Fall.”

China stocks nosedive, triggering another market halt

HONG KONG –  Chinese stocks nosedived Thursday, triggering their second daylong trading halt this week and sending share markets, Asian currencies and oil prices lower as investor jitters rippled across the globe.
The benchmark Shanghai Composite Index tumbled 7.3 percent to 3,115.89 before "circuit breakers" suspended trading for the day. The Shenzhen Composite Index for China's second smaller stock exchange slumped 8.3 percent to 1,955.88.
Chinese government measures introduced last year to prop up share prices after a meltdown in June are being gradually withdrawn, leading to volatile trading. Investors are also unnerved that Beijing has allowed the yuan to weaken, a possible sign the No. 2 economy is in worse shape than thought.
"The sell-off in Chinese equities we have seen this week only emphasizes the point that the stock market intervention may have only delayed the sell-off," said Angus Nicholson, market analyst at IG in Melbourne, Australia.
Chinese stock trading was also suspended on Monday after the market plunged.
The tempest in China's markets has been felt around the world. Foreign investors have little direct involvement in Chinese financial markets, but the size of China's economy means the wild gyrations are a source of concern internationally.
The latest slump comes after China's government guided the yuan lower over several days, an indication authorities are prepared to weaken the tightly controlled currency to boost flagging exports. The yuan rate was set Thursday morning at 6.5646 to the U.S. dollar, the weakest in nearly five years, the official Xinhua news agency reported, citing data from the China Foreign Exchange Trading System.
In early European trading, France's CAC 40 was down 2.5 percent at 4,367.97 and Germany's DAX slid 3.1 percent to 9,899.50. Britain's FTSE 100 cratered 2.3 percent to 5,933.74. Futures augured sharp losses on Wall Street. Dow and S&P 500 futures were each down 2 percent.
The Shanghai benchmark has dropped 12 percent so far this year, which is barely a week old. Thursday's market plunge may have been exacerbated by investors rushing to sell before they were locked out by the automatic trading suspension, some analysts said.
The circuit breakers trip when there are big swings in the CSI 300 index. Trading halted temporarily barely 14 minutes into the morning session when stocks plunged 5 percent. When trading resumed 15 minutes later, stocks plunged further, falling more than the 7 percent limit that triggers a daylong trading freeze.
"There was some apparent panic selling with investors trying to reduce exposure before the mandatory triggers entered into effect," said Gerry Alfonso, trading head at Shenwan Hongyuan Securities in Beijing.
"Sentiment seems to be rather fragile at the moment as the soft macroeconomic environment together with the fear of not being able to sell during a market correction causing some anxiety among investors," he wrote in a note to clients.
Nicholson said, "It's difficult to see the circuit-breakers surviving long in their current form, given they only seem to be further contributing to the volatility in the Chinese market."
Among other Asian stock markets, Japan's benchmark Nikkei 225 index fell 2.3 percent to 17,767.34 and South Korea's Kospi lost 1.1 percent to 1,904.33.
Hong Kong's Hang Seng shed 3.1 percent to 20,333.34 and Australia's S&P/ASX 200 retreated 2.2 percent to 5,010.30.
Benchmarks in Taiwan, New Zealand and Southeast Asia also fell.
Oil prices touched their lowest in more than a decade. Benchmark U.S. crude futures fell $1.43, or 4.2 percent, to $32,54 in electronic trading on the New York Mercantile Exchange. The contract on Thursday dropped $2, or 5.6 percent, to settle at $33.97 a barrel. Brent crude, a benchmark for international oils, fell $1.24, or 3.7 percent, to $32.99 a barrel in London.
In currency markets, the dollar fell to 117.66 yen from 118.67 yen in the previous day's trading as investors bought the Japanese currency as a safe haven. Some other Asian currencies retreated in concert with the yuan. The euro rose to $1.0795 from $1.0778.