IRS Glitch Conceals $51 Million in Political Donations, Watchdog Reports
A technical glitch at the understaffed Internal Revenue Service (IRS) is obscuring millions of dollars in campaign contributions to state-level election groups, including pivotal governor and attorney general races, according to a campaign finance watchdog. The error has left $51 million in donations for the second half of 2025 unaccounted for, raising concerns about transparency as election deadlines approach.
Discrepancy in Donor Disclosures
Researchers at the Center for Political Accountability (CPA), a non-profit that monitors corporate spending, identified the discrepancy in February. Typically, donor and spending lists from the previous year become public after a 31 January deadline, but disclosures for multiple 527 organizations—tax-exempt political campaign groups overseen by the IRS—remain blank. In their place, filings repeatedly display the message: "IRS technical issue preventing e-file reporting."
Jeanne Hanna, vice-president of research at the CPA, highlighted the significance of this disruption. "It's a major change in norms for what's been a pretty routine process for major political organizations," she said. "This is a midterm year that we're going into. There's going to be a lot of spending on state races, and these are the groups that are coordinating huge chunks of spending."
Affected Political Groups
The glitch impacts influential organizations on both sides of the political spectrum, including:
- The Republican Attorney General's Association (Raga)
- The Republican State Leadership Committee (RSLC)
- The Democratic Legislative Campaign Committee (DLCC)
Donations to these groups totaled $41 million for the second half of 2025. While the DLCC's filing included a link to its website with full disclosure, the RSLC and Raga declined to comment, and Raga did not respond to requests. The Republican Governor's Association (RGA) was also affected, with $32 million in donations not itemized, though it uploaded an amended filing earlier this week.
Ongoing Technical Issues and Workforce Cuts
Hanna noted that a similar glitch occurred last summer but was quickly resolved. However, the IRS has not publicly addressed the current issue, leading to concerns about a lack of transparency. "There's been radio silence about whatever the issue is this time," she said. "It is turning into a complete black hole."
The technical error follows significant workforce reductions at the IRS, with more than a quarter of its staff cut after massive reductions by the Department of Government Efficiency (Doge) last year. In a January report to Congress, national taxpayer advocate Erin Collins warned that the agency faces challenges due to these changes, including a 27% workforce reduction and leadership turnover.
Importance of 527 Organizations
Bruce Freed, president and co-founder of the CPA, explained that 527 organizations have grown in influence over the past decade due to partisan gridlock in Washington. State attorneys general, in particular, have gained power by collaborating on multistate lawsuits to block federal actions, such as efforts to block President Biden's student loan relief plan.
"They've been the dominant recipients of corporate money," Freed said. "This is so important because 527s have been absolutely crucial, especially on the Republican side, for reshaping state and national politics and policy." Corporate donations to these groups often total millions annually, as it is easier for companies to contribute to political organizations than to individual campaigns.
Upcoming Deadlines and Resolution Efforts
With 2026 being an election year, 527 groups must file reports quarterly, with an upcoming deadline on 15 April. An IRS spokesperson stated on 18 February that the issue had been resolved but did not respond to follow-up questions. The lack of clarity leaves organizations scrambling to meet disclosure requirements, potentially undermining public trust in campaign finance transparency.
