Staff Reports
Federal power loves data. That has always been the point. Now two separate fights in federal court show that agencies are turning mass data grabs into routine business — and ordinary Americans, donors and investors are paying the price. Young America’s Foundation has sued the IRS to stop forced donor disclosure on Schedule B of Form 990. At the same time, the New Civil Liberties Alliance is pushing the court to stop the SEC from delaying review of the Consolidated Audit Trail (CAT), a permanent database of trillions of trades. Both cases ask the same basic question: who watches the watchers?
Young America’s Foundation v. IRS: Donor Privacy Under Fire
The National Taxpayers Union Foundation filed a fresh lawsuit on behalf of Young America’s Foundation to block the IRS from demanding donor names and private details on Schedule B. The plaintiffs point to real risks — past leaks by an IRS contractor show donor data can be exposed — and argue mandatory collection chills free association guaranteed by the First Amendment. The legal claim is simple: if the government is going to collect lists of donors, it must meet strict constitutional standards and prove that sweeping collection is needed. Right now the IRS is holding data it rarely uses and has repeatedly failed to protect.
Why Schedule B matters
Donor anonymity is not some quaint tradition. It protects people from intimidation and harassment when they back causes that are unpopular in their circles. For conservative groups that work on college campuses, the fear of retribution is real. Forcing every charity to hand over donor lists to a federal database — when the IRS examines only a sliver of returns — looks less like regulation and more like a fishing expedition. That is exactly why YAF’s suit is about more than paperwork: it is about the right to associate without government curiosity or exposure.
NCLA v. SEC: CAT, Delays, and the Permanent Data Dragnet
The New Civil Liberties Alliance is pressing hard against what it calls the SEC’s serial delay tactics. The agency has already asked for lengthy pauses while the CAT continues to gather a permanent, searchable record of virtually every trade in U.S. markets. NCLA’s point is stark: you do not slow-roll judicial review of a mass, suspicionless database that can be searched “at will” without compelling reasons. The Consolidated Audit Trail is not a small program. It is a ready-made panopticon for financial activity, and the agency’s request for another multi-month delay reads like buying time instead of answering tough constitutional questions.
The larger legal context
Both lawsuits draw strength from recent Supreme Court guidance limiting broad digital searches, like the geofence/location ruling that warned against sweeping, indiscriminate surveillance. If the high court has warned about bulk location searches, it should be obvious mass financial surveillance and blanket donor collection deserve the same skepticism. The common thread is privacy and constitutional restraint. Government officials — including SEC Chair Paul S. Atkins — should remember that safeguarding national security does not mean ignoring the Constitution. Nor does it mean treating citizens as default suspects.
The solution is clear: courts need to move these cases forward, not let agencies keep their giant data programs on autopilot while litigants wait for justice. Congress should demand better oversight and insist on real security practices before any agency stores private lists of donors or permanent records of every trade. We can have effective regulation without turning data into a government shopping list. If federal agencies want more data, they must prove why they need it, protect it like it really matters, and answer to a court — not hide behind procedural delays. Until they do, conservatives and investors have every reason to file suit and expect judges to stop the data dragnet.
