Comments on IRS Announcement 2000-84 on the Need for Guidance
Clarifying the Application of Internal Revenue Code Provisions
to Use of the Internet by Exempt Organizations
February 2001

Contents | I | II | III | IV | V | VI

IV. Political and Lobbying Activities

A | B | C | D | E | F | G

2. 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?

   The Need for Guidance

   This is a Category Three (3) item. Some guidance would be helpful, such as through the development of a safe harbors, but definitive guidance is not currently possible or advisable given the rapidly changing technology and uses of the Internet. There is no current law on this issue.

   Recommendations

   We recommend that the IRS issue guidance that establishes the following principles:

   A Section 501(c)(3) organization should be permitted to link to candidates’ websites as part of the 501(c)(3) organization’s non-partisan voter education activities so long as the links are established on a non-partisan basis. For example, where a Section 501(c)(3) organization publishes a non-partisan voter guide that otherwise qualifies as non-partisan educational activity, the website should also be able to provide links to the websites of all qualified candidates, as long as all candidates in a race are treated equally. Presumably, if some candidates in the race do not have a website, then the organization should make available phone numbers or addresses where the user can receive comparable information.

   A Section 501(c)(3) organization should be able to link to a broad range of politically diverse PACs or other political organizations that provide candidate profiles, voting history and records, and similar information. The relevant fact and circumstance is whether the Section 501(c)(3) organization is providing access to a broad range of websites that represents the full spectrum of views. The IRS might provide some examples, including safe harbors. One favorable example that the IRS might consider is the links section on LWV.org, the League of Women Voters Website.

   Often a Section 501(c)(3) organization and a Section 501(c)(4) organization will be affiliated, by sharing a common name, some common board members and employees, and even common offices. A Section 501(c)(3) organization that is affiliated with a Section 501(c)(4) organization should be able to provide a link directly to the Section 501(c)(4) organization’s home page, particularly if the Section 501(c)(4) organization also links back to the Section 501(c)(3). The rule might be different if the Section 501(c)(3) organization provides a link directly to a portion of the Section 501(c)(4) organization’s website that takes positions in support of, or opposition to, candidates. The proposed "one link" safe harbor would permit this type of link.

   Sometimes a Section 501(c)(3) organization and a related Section 501(c)(4) organization will share a website. It would be helpful to have clarity on a shared website situation. As a safe harbor, the IRS might provide that Section (c)(3) and (c)(4) organizations that are legally affiliated through common board members and/or a shared name can share a website if: (a) some pages on the site are shared and others are not; (b) the shared pages, such as the home page and pages with educational information, do not contain any statements in support of or opposition to candidates; (c) pages specific to the Section 501(c)(4) organization’s work or that contain any political activities are paid for and maintained exclusively by the (c)(4); and (d) the Section 501(c)(3) organization pays for no more than its fair share of the common areas of the website. In this context, it may be helpful to think of a website like a physical office occupied by one or more organizations. A Section 501(c)(3) and a (c)(4) organization will often share office space and other resources, which is permitted as long as the Section 501(c)(3) organization pays for no more than its fair share and does not contribute to any political activities that the (c)(4) organization engages in.

   There may be other situations in which a Section 501(c)(3) organization should be able to link to a more limited number of websites because those sites provide the comprehensive discussion of a particular issue, even if other portions of those sites are political. It would be particularly helpful for charities trying to develop some certainty about their affairs if the IRS were to adopt some clear rules. The proposed "one link" safe harbor would permit a Section 501(c)(3) organization to link to the portions of another organization’s website that contain purely educational content.

3. A | B | C | D | E | F | G

4. 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?

   The Need for Guidance

   This is a Category Four (4) item. The use of the Internet is incidental to larger substantive issues, the substantive issues are themselves in need of administrative interpretation, and the specific circumstances of the use of the Internet should be addressed only as part of more comprehensive guidance on the underlying substantive issues.

   Existing Authority

   Under current law, Section 501(c)(3) organizations that are not private foundations are permitted to engage in lobbying activities as long as the lobbying does not constitute a "substantial part" of the organization’s activities. Some public charities are allowed to make an election under Section 501(h) and have their permitted lobbying measured by a specific test that looks at their lobbying expenditures. For other organizations, the election is not available, and some organizations that can make the election choose not to.

   Organizations that do not make the Section 501(h) election are subject to a facts and circumstances analysis as to whether their lobbying constitutes a substantial part of their activities. Instead of looking at the level of expenditures, as is the case with the 501(h) election, for these organizations, the IRS looks at the totality of activities, and there is no clearly defined rule or test. In addition, the definitions of lobbying under Section 501(h) do not necessarily apply if the election is not made. Accordingly, certain communications may be lobbying for organizations that do not make the Section 501(h) election, but not lobbying for electing organizations, and some of the exceptions to the lobbying definitions for electing charities may not be available for non-electing charities.

   Some of the leading cases and rulings are:

   Seasongood v. Commissioner, 227 F.2d 907 (6th Cir. 1955) – suggested that attempts to influence legislation that constituted 5 percent of an organization’s total activities, were not substantial. The concept of "activities," however, is not clearly defined.

   Christian Echoes National Ministry, Inc., v. U.S., 470 F.2d 849 (10th Cir. 1972), cert. denied, 414 U.S. 864 (1974) – held that there is no percentage test.

   Haswell v. U.S., 500 F.2d (Ct. Cl. 1974) – held that 16.6 to 20.5 percent of an organization’s activities on lobbying is substantial. Again "activities" is not clearly defined.

   IRS General Counsel Memorandum 36148 (Jan. 28, 1975) attempts to summarize the law. Relevant factors include:
    

   • The percentage of time devoted to an activity.
      
   • The amount of volunteer time devoted to an activity.
      
   • The percentage of a budget devoted to an activity.
      
   • The amount of publicity the organization assigns to the activity.
      
   • The continuous or intermittent nature of the activity.

   In addition, the IRS looks at the overall impact and effect of the activity.

   Recommendations
    

   1. The same types of tests that the IRS applies in non-Internet scenarios should apply to a website analysis. If the same amount of time and energy is put into a website as is put into other, non-web activities, there is no reason to consider the website lobbying just because it might have a more broad-reaching audience. Charities should not be penalized for using the Internet if they spend the same amount of activity and energy on a lobbying activity that happens to involve the Internet, even if it may have a broader impact than a non-web activity that involves substantially more time and energy.
       
   2. Clearly, concrete guidance on this issue would be helpful. If the IRS is going to update its formal guidance on the "substantial part" test, then it would be helpful, indeed essential, also to discuss lobbying on the Internet. Otherwise, guidance with respect to the Internet alone would not be warranted.

5. A | B | C | D | E | F | G

6. 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)?

   The Need for Guidance

   This is a Category Three (3) item. Some guidance would be helpful, such as through the development of safe harbors, but definitive guidance is not currently possible or advisable given the rapidly changing technology and uses of the Internet. There is currently no law on this question.

   Scope of the Question

   As with hyperlinks in the context of political activity, exempt organizations could benefit from guidance on the use of hyperlinks in lobbying situations. There is really no relevant law directly on point today. This question is very much related to the next question, which asks whether an organization has made a call to action on a website. For purposes of this Question D, we will assume that the first organization’s website contains none of the elements of lobbying itself, and the organization would be considered to be lobbying only if the activities of the linked website were attributed to it. We also assume, for purposes of Question D, that the page it is linked to either contains all three elements of grassroots lobbying or contains none of the elements. The analysis of Question E, below, considers, among other things, the possibility that the first website could contain some of the elements of lobbying with the call to action on another website, or that the second website contains different parts of the lobbying elements on different webpages.

   Recommendations

   In order to bring clarity to this question, the IRS should adopt the following guidelines:
    

   1. As a general presumption or rule, the activities of one organization should not be attributed to another organization. We have to recognize that a link is very different, in terms of timing and efficiency, from a printed reference to a phone number or address. Nonetheless, conceptually, a link is no different than a reference in written material to the name and phone number of another organization – it is simply a more efficient way of getting from the first location to the second. Charities should not be penalized for taking advantage of more efficient technology.
       
   2. The IRS should adopt the proposed "one link" safe harbor. If a link takes the user to a webpage that does not itself contain lobbying, and an additional link would be required to move to the lobbying page, then the link should not create lobbying. Presumably, with a safe harbor, organizations would structure their affairs to take advantage of it; for example, by creating multiple webpages within a website, rather than one continuous webpage. The more attenuated the elements, the less likely the user will "hear" the lobbying message.
       
   3. The above would be a safe harbor. If the webpage to which the user is taken does contain lobbying, the IRS should examine at least two key facts: (1) the message on the first home page from which the user was sent to the page that contained lobbying and (2) the proximity of the lobbying message to the place on the page where the user was taken by the link. In this case, there would only be lobbying if it were clear that communication on the first page, combined with the proximity on the second page to the lobbying communication, would cause a reasonable user to consider the communication to be lobbying.
       
   4. A Section 501(c)(3) organization should be able to link to a related organization’s home page without having the activities of that related organization attributed to the Section 501(c)(3) organization. In order to take advantage of the proposed safe harbor, the related entity should not place lobbying on its home page.
       
   5. A Section 501(c)(3) and a Section 501(c)(4) or other related organization should be able to share a website, under the same circumstances described above with respect to Question B.

   Much of the relevance of this issue goes to how we treat the website and what portion of the costs of constructing the site are included in lobbying, since the Section 501(h) election looks at actual expenses.

7. Contents | I | II | III | IV | V | VI