November 2, 2000 | Read Time: 2 minutes
By GRANT WILLIAMS
The Internal Revenue Service says that it is “considering the necessity” of putting out guidance that would clarify how the tax code should be applied to the use of the Internet by charities and other nonprofit organizations.
In an announcement, the I.R.S. asked for comment on the way the tax agency should view charities that have Web sites or communicate with the public through electronic mailing lists, list serves, chat rooms, or other methods.
Among the revenue service’s “general” and practical concerns is whether a nonprofit group that constantly modifies its Web site should be required to maintain information from previous versions of its site.
But the I.R.S. also has specifics in mind. For example, the tax agency said, “when a charitable organization engages in advocacy on the Internet, questions arise as to whether it is conducting political or lobbying activity, and if so, to what extent.”
The situation is complicated by some charities’ electronic ties with other groups engaging in political or lobbying activities on the Internet, the I.R.S. said. “The ease with which different Web sites may be linked electronically (through a ‘hyperlink’) raises a concern about whether the message of a linked Web site is attributable to the charitable organization,” the government said. “The service is considering whether clarification is needed on how to apply the prohibition on political campaign intervention and substantial lobbying activity for charitable organizations engaging in activities on the Internet.
The I.R.S. also said that it might need to make clear how unrelated-business income tax might be levied on payments that nonprofit organizations receive from companies that display advertising messages on their Web sites or might be applied to revenues from charities’ own sales activities.
In addition, the government said it wants advice on whether it should issue guidance explaining how charities that solicit for gifts over the Internet should follow existing laws, including a statute that requires groups to give donors a breakdown of what deductions can be claimed when a contribution of more than $75 is made in exchange for book, meal, or other item of value.
Comments should be sent to the I.R.S. by February 13, 2001, by writing to the Internal Revenue Service, 1111 Constitution Avenue, N.W., Washington 20224, Attention: Judith E. Kindell.
The text of the revenue service’s request for comments (Announcement 2000-84, Internal Revenue Bulletin 2000-42) may be found on the agency’s Web site, http://www.irs.ustreas.gov/bus_info/bullet.html.
