II. Broad Principles
- Attribution
The question of whether one organization’s
communications and activities should be attributed to another solely because of a link1 from one website to
another is central to the tax law analysis. This question has broad ramifications in a
variety of substantive contexts, including UBIT, political and lobbying activities.
The fact that an organization’s website contains a link to another’s website
should not automatically result in attribution. The tax law does not as a general matter
attribute the activities of one legal entity to another, even when the organizations are
related. For example, in the corporate context, it is fundamental that the separate
identity of a corporation will be respected, so long as the corporation is formed for a
valid purpose, observes corporate formalities and is not a sham. Moline Properties,
Inc. v. Commissioner, 319 U.S. 436 (1943); National Carbide Corp. v. Commissioner,
336 U.S. 422 (1949). This separate identity principle extends to nonprofit, tax-exempt
organizations. Center on Corporate Responsibility Inc. v. Schultz, 368 F. Supp. 863
(Dist. D.C. 1973).
The presumption against attribution should be especially strong in the context of a
link from one organization’s website to another’s. An exempt organization that
provides a link from its website generally has no control over the content at the linked
site, which can change daily.
There may very well be circumstances in which attribution is appropriate. The question
of attribution must be determined based on all facts and circumstances, however, in the
same manner that such questions are resolved outside the Internet context.
In view of the importance of the attribution question, and of the extent to which
exempt organizations are using the Internet, there is a need for a bright line safe harbor
with respect to links. We propose that the IRS adopt a "one link" safe harbor.
Specifically, if it is necessary for a viewer to make more than one link to reach a
webpage, then there is no attribution with respect to the content on that page. By
"one link," we mean that the viewer sees at least one page on his or her screen
after viewing the organization’s page containing the link and prior to viewing the
page containing the content in question. The safe harbor would encompass, but not be
limited to, a "jump" or "splash" page that an organization inserts to
alert the viewer that he or she is leaving the organization’s site. This would allow
an organization to construct a separation between its webpage and that of another
organization that would be apparent to any user, in order to avoid the nearly impossible
task of the first organization maintaining a constant review of the ever-changing content
at the linked webpage.
The proposed safe harbor is premised on an assumption that the creation of a link
requires an affirmative action on the part of the exempt organization hosting the website.
In the event that technology is developed that will allow a viewer to link to any word,
name or phrase on an organization’s website without the assistance of any coding
associated with the organization’s website, the proposed safe harbor would be
rendered obsolete.
Any such safe harbor should not create a negative inference. If a viewer required only
one link to reach a webpage from the exempt organization’s page, attribution would
not be automatic, and the fact that only one link was required would not be weighed
against the organization in assessing whether attribution was appropriate.
- No Chilling Effect
The Internet enables all users, including
exempt organizations, to communicate widely and effectively at very low cost. Absent a
compelling reason to the contrary, the IRS should not interpret the tax law in a manner
that discourages exempt organizations from utilizing scarce charitable dollars in the most
cost-effective manner possible.
For example, it is often far less expensive for an organization to provide written
statements regarding charitable contributions as required under Sections 170(f)(8)2 and 6115 through
email communications to donors rather than through paper communications. The IRS should
provide clear guidance that this procedure satisfies legal requirements.
Similarly, the IRS should not interpret the tax law in a manner that inhibits exempt
organizations’ use of this powerful medium in comparison to other users. Providing a
link to another organization’s website differs from providing the other
organization’s address or telephone number, or even website address, only in the
level of convenience that it affords the viewer. Exempt organizations should not be
penalized for using the most convenient and advanced technology available.
- Internet Text as Written Communication
A variety of tax rules
apply to communications that are in "written" or "printed" form. In
general, such rules should apply to Internet text (as opposed to audio or video)
communications, including webpages, email, and wireless text messages received via a
personal digital assistant or wireless phone. The characterization of a text communication
as "written" or "printed" should not turn on whether it appears on a
piece of paper or a screen.