IRS may move to revoke tax exempt status of some non-profit websites over links : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

ACTION ALERT: IRS to censor non-profit websites by CCHC 9:21am Wed Nov 29 '00

The IRS is threatening to hold non-profit organizations liable for the comments made by visitors to their websites and by the actions of organizations to which the websites have links. [This seems to be aimed directly at Indymedia!!] "Guilty" organizations would be stripped of their tax-exempt status. The IRS is now seeking public comments on their intentions (see address below). Commenters may also send a copy of their comments to Senators and Representatives in Congress where concern has been expressed (see below). The deadline for public comments is February 13, 2001. Freedom of speech and the freedom of non- profit organizations to dispense valuable information depends on citizen response. The Internal Revenue Service (IRS) acting on its own initiative, without legislative authorization, is considering "the necessity of issuing guidance that would clarify the application of the Internal Revenue Code to use of the Internet by [tax] exempt organizations. In short, the IRS wants to monitor and regulate free speech on the Internet.

Organizations may be held liable for the activities of other organizations over whom they have neither control or internal knowledge of operations. Organizations may also be held liable for the speech of individual comments made online at the website.

Tax-exempt (non-profit) organizations are required by law to restrict lobbying activities to a minimum, or lose their tax-exempt status. Those that take the IRS (h) election are allowed to allocate a small percentage of their revenues to lobbying activities.

Clarifying an intention to regulate speech, the IRS announcement includes many questions under consideration regarding regulation of the use of the Internet by non-profit, tax exempt organizations. These are a few:

* 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 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?

* Does providing a hyperlink to the website of another organization that engages in lobbying activity constitute lobbying by a charitable organization?

* 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 maintain the information from prior versions of the organization's website?

The effect of IRS regulation and monitoring of Internet sites--no doubt with the threat of hefty fines for infringements--will seriously limit public discourse and freedom of speech. Even if the website is eventually found to be innocent of an IRS charge, damage to the organization will be extensive: in lawyer fees, temporary or long- term loss of the website, and energy directed away from operations to focus on securing exoneration.

Members of Congress are also concerned. Rep. Dick Armey chastised the IRS' request for comments saying, "The IRS has no business getting involved in whether a think tank has links on its website, or how often a charity's site is updated. The idea of turning the tax man into a net cop would have a chilling effect on free speech on the Internet" (Tech Law Journal, 10/26/00)

---Citizens' Council on Health Care November 28, 2000

---------------------------------- TO COMMENT:

Send public comments to:

Internal Revenue Service 1111 Constitution Ave., NW Washington, DC 20224 Attn: Judith E. Kindell

Regarding Document: IRS Announcement 2000-84, Dated October 16. DEADLINE: February 13, 2001.

View IRS document at:

-- Carl Jenkins (, November 29, 2000

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