Free Speech Coalition, Inc.
8180 Greensboro Drive, Suite 1070, McLean, VA, 22102-3860
Phone: (703) 356-6912 Fax: (703) 356-5085
February 13, 2001
Internal Revenue Service
Attn.: Judith Kindell
1111 Constitution Avenue, N.W.
Washington, DC 20224
Re: Comments of the Free Speech Coalition, Inc.,
in Response to IRS Announcement 2000-84
Dear Ms. Kindell:
The Free Speech Coalition, Inc. ("FSC")
appreciates the opportunity to comment on the issues raised by IRS
Announcement 2000-84. This IRS announcement solicited public comments
with regard to the application of Internal Revenue Code provisions
governing exempt organizations to certain activities which such
organizations may conduct on the Internet.
The Free Speech Coalition is an alliance of liberal,
conservative and non-ideological issue-activists who are particularly
concerned with the preservation of the rights of nonprofit advocacy
organizations. FSC members have felt compelled to band together
to defend the interests of Americans who want to participate fully
in the formation of public policy in this country without undue
governmental interference and restriction. This diverse group, which
came together in 1993, includes many of the other nonprofit organizations
which have joined in making these comments.
The nonprofit organizations which are members of FSC
obviously have a strong interest in the issues raised by the IRS
in Announcement 2000-84. FSC understands the service must preserve
an audit trail to ensure that nonprofits are held responsible for
their actions, but take issue with those issues raised in the announcement
that are likely to result in even greater micromanagement (in the
guise of regulation) of nonprofits by the IRS. Take, for example
the "issue" as to whether statements made in a newsgroup
should be deemed to be attributable to a nonprofit maintaining the
forum; these intrusions raise serious questions as to whether unreasonable
burdens are being raised to free expression and association by nonprofits
and their members. Other issues suggest severe penalties for generally
innocuous actions, such as providing a hyperlink to an organization
involved in political campaigning, or providing information on politically-related
issues on a web page.
We appreciate the decision by the IRS to solicit public
comment on these questions before proceeding to regulatory action
(or clarification of these issues through the conduct of enforcement
actions on exempt organizations). However, we would strongly encourage
the IRS not to twist the existing IRC so that it would ostensibly
cover new, unanticipated applications such as those suggested
in IRS Announcement 2000-84. Should there truly be a genuine need
for new regulation of the use of the internet by nonprofits, the
IRS should await the law making of Congress.
Our response to individual questions posed by Announcement
A. General Issues
Does a website constitute a single publication
or communication? If not, how should it be separated into distinct
publications or communications?
A website would normally be one big publication, with
moveable, changeable parts. Any other answer would put the service
into a metaphysical inquiry with many more questions than easily
When allocating expenses for a website, what methodology
is appropriate? For example, should allocations be based on webpages
(which, unlike print publications, may not be of equal size)?
Any effort to force a nonprofit to allocate costs
should be undertaken by the nonprofit, perhaps with assistance from
their auditors, and based on a rule of reason. In other words, any
reasonable allocation method devised by the nonprofit and its expert
consultants should be approved. Any effort to impose from the outside
some method of joint cost allocation would create a legal, and financial
nightmare. If the service must adopt some objective rule, we suggest
that when content on a website is determined to be either of a type
subject to restriction (such as grass roots lobbying) or not in
furtherance of exempt purposes, a bright line test be adopted; for
this purpose the number of web pages upon which such a statement
appears, would be an easily ascertainable way in which to allocate;
this would provide more than the "column inch" method
the service has rejected in hard copy circumstances, but also avoid
the "tainting rule" that has been abandoned by the service
in areas such as lobbying activity and service provision in connection
with licensing agreements.
Unlike other publications of an exempt organization, a website
may be modified on a daily
basis. To what extent and by what means should an exempt organization
information from prior versions of the organization's website?
Taken to an extreme, this question suggests that a
nonprofit might be required to save each and every change, including
the date and time of change, to its website forever; that would
be unreasonable in our view. Any requirement that a web site be
capable of storage must recognize that smaller nonprofits may not
be able to afford to comply, and therefore might be forced to close
down their site. Even large nonprofits should be protected from
new burdensome requirements.
To what extent are statements made by subscribers
to a forum, such as a listserv or newsgroup, attributable to an
exempt organization that maintains the forum? Does attribution vary
depending on the level of participation of the exempt organization
in maintaining the forum (e.g., if the organization moderates discussion,
acts as editor, etc.)?
The suggestion that an exempt organization should
be legally liable for statements made on a forum maintained by that
organization (excepting official statements made by an authorized
official) is absurd. To impose on exempt organizations the obligation
to censor and control such forums would render them useless, and
would force such organizations to close these forums down out of
fear that penalties might ensue. No nonprofit could afford to have
its tax exemption hanging by a thread daily, risking its revocation
because an enemy of the organization were to enter a chat room and
make improvident statements. Such forums are valuable for their
facilitation of communication between individuals sharing similar
concerns and interests (e.g., inner-city schools, or governmental
actions impacting First Amendment freedoms). For the IRS to require,
in essence, the elimination of such forums only serves to reduce
the effectiveness and productivity of exempt organizations without
resulting in any evident benefit. So long as the organization does
not give its formal approval to statements, statements should not
be attributed to them. Indeed, a formal disclaimer, disavowing support
of any statement made there, should eliminate any attribution.
B. Political and Lobbying Activities
What facts and circumstances are relevant in determining
whether information on a charitable organization's website about
candidates for public office constitutes intervention in a political
campaign by the charitable organization or is permissible charitable
activity consistent with the principles set forth in Rev. Rul. 78_248,
1978_1 C.B. 154, and Rev. Rul. 86_95, 1986_2 C.B. 73 (dealing with
voter guides and candidate debates)?
Once again, a formal disclaimer from a website, listserve
or chat room that is open to the general public should insulate
the nonprofit from attribution of the content in any third party
communication. For purposes of this question, we can see no fundamental
difference between a nonprofits web site and any other form
of statement. Nevertheless, maintaining an Internet web site is
not the same as conducting mailings or purchasing advertisements
in mass media.
Does providing a hyperlink on a charitable organization's website
to another organization
that engages in political campaign intervention result in per se
prohibited political intervention? What facts and circumstances
are relevant in determining whether the hyperlink constitutes a
political campaign intervention by the charitable organization?
Web sites can contain dozens, hundreds, or even thousands
of links to other websites. Barring the nonprofit web site from
linking to the web site of other groups because of some form of
attribution back to the nonprofit would mean that no nonprofit could
have any links on its site. Even if a charity linked to a university
site, the university site might provide the websites of candidates
for the assistance of their students. The IRS has no business checking
out first level, second level, or any levels of linkage on web sites
so that it can attempt to attribute political action to a charity.
If the charity web site stated "Vote Smith, click here to find
out how to volunteer" that would be an impermissible statement.
Anything else should be permitted.
For charitable organizations that have not made
the election under section 501(h), what facts and circumstances
are relevant in determining whether lobbying communications made
on the Internet are a substantial part of the organization's activities?
For example, are location of the communication on the website (main
page or subsidiary page) or number of hits relevant?
Does providing a hyperlink to the website of another
organization that engages in lobbying
activity constitute lobbying by a charitable organization? What
facts and circumstances are relevant in determining whether the
charitable organization has engaged in lobbying activity (for example,
does it make a difference if lobbying activity is on the specific
webpage to which the charitable organization provides the hyperlink
rather than elsewhere on the other organization's website)?
To determine whether a charitable organization that
has made the election under section 501(h) has engaged in grass
roots lobbying on the Internet, what facts and circumstances are
relevant regarding whether the organization made a "call to
Does publication of a webpage on the Internet by
a charitable organization that has made an election under section
501(h) constitute an appearance in the mass media? Does an email
or listserv communication by the organization constitute an appearance
in mass media if it is sent to more than 100,000 people and fewer
than half of those people are members of the organization?
What facts and circumstances are relevant in determining
whether an Internet communication (either a limited access website
or a listserv or email communication) is a communication directly
to or primarily with members of the organization for a charitable
organization that has made an election under section 501(h)?
The analysis for lobbying should be the same as for
electioneering. If a nonprofits web site states, "Support
increased funding for the school lunch program, click here to find
out how to send an e-mail to Congress," that is lobbying. Anything
short of that is not.
C. Advertising and Other Business Activities
To what extent are business activities conducted
on the Internet regularly carried on under
section 512? What facts and circumstances are relevant in determining
activities on the Internet are regularly carried on?
Are there any circumstances under which the payment
of a percentage of sales from
customers referred by the exempt organization to another website
would be substantially
related under section 513?
We have no comment on these questions.
Are there any circumstances under which an online
"virtual trade show" qualifies as an
activity of a kind "traditionally conducted" at trade
shows under section 513(d)?
We have no experience with "virtual trade shows."
D. Solicitation of Contributions
Are solicitations for contributions made on the
Internet (either on an organization's website
or by email) in "written or printed form" for purposes
of section 6113? If so, what facts and
circumstances are relevant in determining whether a disclosure is
in a "conspicuous and
easily recognizable format"?
IRC section 6113 applies only to solicitations "in
written or printed form," "by television or radio,"
or "by telephone." Since a web site or email is none of
these, there is no regulatory authority under this section. Only
Congress can change the law.
Does an organization meet the requirements of section
6115 for "quid pro quo" contributions with a webpage confirmation
that may be printed out by the contributor or by sending a confirmation
email to the donor?
IRC section 6115 requires that in certain cases a
nonprofit "provide a written statement." Either of the
alternatives in the question would appear to meet this test.
Does a donor satisfy the requirement under section
170(f)(8) for a written acknowledgment of a contribution of $250
or more with a printed webpage confirmation or copy of a confirmation
email from the donee organization?
IRC section 170(f)(8)s requirement for a "written
acknowledgment" would appear to be met by both of the methods
If the IRS should believe that the current laws do
not provide adequate authority for their regulation of nonprofits,
the IRS should present these concerns to Congress, and obtain new
authority over the Internet activities of exempt organizations,
rather than twisting the existing code for purposes it was not intended.