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
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IV. Political and Lobbying Activities
A | B | C | D | E | F | G
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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 action”?
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.
Current Law
Under current law, grassroots lobbying is defined as a communication with the general
public or any segment thereof that (1) refers to specific legislation, (2) reflects a view
on that legislation, and (3) encourages the recipient to take action with respect to the
legislation (a "call to action").
There are four types of calls to action. Treas. Reg. § 56.4911-2(b)(2)(iii).
- A statement that the recipient should contact a legislator or an employee of a
legislative body, or should contact any other government official or employee who may
participate in the formulation of legislation.
- A statement of the address, telephone number, or similar information of a legislator or
an employee of a legislative body.
- Inclusion of a petition, tear-off postcard, or similar material for the recipient to
communicate with a legislator or an employee of a legislative body (or other government
official involved in the legislation).
- Specifically identifying one or more legislators who will vote on the legislation as:
opposing the charity’s view on the legislation, being undecided, being the
recipient’s representative in the legislature, or being on the committee or
subcommittee that will consider the legislation.
Often the analysis is straightforward – a charity publishes a message such as:
"Call Legislator X and tell her to vote no on the Clean Air Bill." In other
situations, one must review a complicated communication to determine if, within the entire
communication, all of the required elements for lobbying are present. For example, a
two-page document may contain a general discussion of an issue, with a single reference to
a specific piece of legislation embedded in the article but not discussed at great length.
At the end of the discussion, the document might say, "So contact your Congressmen to
ask about their views on clean air." Depending on the overall context, none, part, or
all of this discussion piece might be grassroots lobbying.
Recommendations
In its simplest form, Question E is asking when does something on a website
constitute a "call to action." With respect to this narrow question, the only
difference between a website and a printed text is that a website allows for links. Each
of the four types of calls to action described above should also be a call to action if
set forth directly on a website. Where an organization affirmatively creates a direct link
on a website to a legislator’s email address, the result is very much like a tear-off
post card, and should be treated as such.
There are other scenarios for which it would be helpful to have some guidance. These
have to do with when the three elements for grassroots lobbying are deemed to be part of
the same communication, and this question relates very much to the issue of whether to
treat a website with multiple pages as one communication or as many. There at least four
scenarios (and probably more):
Scenario 1. In the first (simplest) scenario, a single webpage (meaning you can
scroll from beginning to end without the need of further links) contains all three
elements of grassroots lobbying. In that case, there will usually be a grassroots lobbying
communication.
Scenario 2. In a second scenario, an exempt organization operates a website, but
the different elements of grassroots lobbying are not set forth on the same page. For
example, one page discusses a substantive issue, refers to pending legislation, and then
reflects a view on the legislation. This first page links to another page that sets forth
the names and addresses of legislators. The link could be in the text itself or appear as
an overlay, usually on the left side or top of the website. This would normally constitute
a grassroots lobbying communication.
Scenario 3. Same as the second scenario: one page on the organization’s
website contains a discussion of legislation and reflects a view on it, another page
contains the call to action. In this example, however, the two pages are not directly
linked. Either the user must link back to the home page to then link again to the page
with the names and addresses of legislators, or there is an intermediary page between the
first page and the page with the names and addresses, and that intermediary page contains
some non-lobbying substance; for example, it discusses various ways in which a user might
learn more about the pending legislation. In this case, in our view, the exempt
organization should be able to avail itself of the proposed "one link" safe
harbor. It should be able to host a website that sets forth, in one location, a discussion
of and views on legislation, and in another location, the elements of a call to action, as
long as the two are not directly linked.
Scenario 4. In this scenario, the first organization has a webpage with the
first two elements of grassroots lobbying, but it then links to another entity’s
website, which contains the names and addresses of legislators. In this case, we would
again suggest a one link safe harbor. If the link goes to a page that does not have the
four types of a call to action, there is no lobbying. If the link goes to a webpage that
does have a call to action, then we look at what the first organization said in connection
with the link and the proximity of the linked location to the actual information that
would constitute a call to action.
A | B | C | D | E | F | G
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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 list serve communication by the organization constitute an
appearance in mass media if it is sent to more than 100,000 and fewer than half of those
people are members of the organization?
The Need for Guidance
This is a Category One (1) item. We do not believe that
guidance is required on this issue because the current Treasury Regulations are clear, and
the answer to both IRS questions is "no."
Existing Authority
Although one of the requirements for grassroots lobbying is a "call to
action," communications via paid mass media advertisements regarding highly
publicized legislation are subject to special rules that can obviate the need for a call
to action.
A paid mass media ad is presumed to be grassroots lobbying if it: (1) is made within
two weeks before a vote by a legislative body or committee on (2) highly publicized
legislation, (3) reflects a view on the general subject of that legislation, and (4) either
refers to the legislation or encourages the public to contact legislators on the
general subject of the legislation, even though it does not include any call to
action. The grassroots presumption may be overcome by showing that the timing of the ad
was unrelated to the upcoming vote.
This exception to the call to action rule requires a "paid" mass media ad.
The current rule includes an explicit list of media that are included in the definition of
"mass media" — a list that includes "television, radio, billboards,
and general circulation newspapers and magazines." The regulations also tell us that
"general circulation newspapers and magazines" do not include newspapers and
magazines published by an organization which has filed a 501(h) election, except where
both the total circulation of the newspaper or magazine is greater than 100,000 and fewer
than one-half of the recipients are members of the organization. In the definition of
"mass media," there is no mention of the Internet or a website. See
Treas. Reg. § 56.4911-2(b)(5)(iii)(A).
The regulations further provide that "where an electing public charity is itself a
mass media publisher or broadcaster, all portions of that organization’s mass media
publications or broadcasts are treated as paid advertisements in the mass media, except
those specific portions that are advertisements paid for by another person." Treas.
Reg. § 56.4911-2(b)(5)(iii)(B).
Analysis and Recommendations
The publication of a webpage on the Internet by a charitable organization that has made
an election under Section 501(h) does not, per se, constitute an appearance in the
mass media. First, we have a regulation that provides a specific and limited definition of
"mass media." This definition interprets a part of the Code that deals with a
bright line safe harbor — the Section 501(h) election. Any change in this definition
would require an amendment to the regulation. The regulation is not stated in terms of a
descriptive list, but rather provides an exclusive list of media that can be mass media.
Second, even if the regulations are amended to treat the Internet as a mass media, like
television or radio, every organization that operates a website should not be considered
to be a mass media publisher. The exception in the regulation that treats a charity,
itself, as a mass media publisher or broadcaster was designed to apply to a limited number
of organizations that actually publish newspapers and magazines for sale to the public or
that actually broadcast television or radio programs but not to all organizations that
simply use the Internet as another tool for conveying their message.
In addition, an email or list serve communication by the organization does not
constitute an appearance in mass media even if it is sent to more than 100,000 and fewer
than half of those people are members of the organization. An email or list serve
communication is not the publication of a general circulation newspaper or magazine. The
current mass media regulation does not encompass a mass mailing of a letter. It refers to
a "paid" mass media advertisement, and substantively, an email letter sent, even
via a list serve, while it might constitute a mass mailing, is not a paid mass media
advertisement, nor does it make the operator of the list serve a mass media publisher or
broadcaster.
Absent an amendment to the Treasury Regulations, IRS guidance is not required on this
subject.
A | B | C | D | E | F
| G
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What facts and circumstances are relevant in determining whether an
Internet communication (either a limited access website or a list serve or email
communication) is a communication directly to or primarily with members of the
organizations or a charitable organization that has made an election under Section 501(h)?
The Need for Guidance
This is a Category Two (2) item. The IRS could be helpful in
discussing how existing law applies to the Internet.
Existing Authority
The current Treasury Regulations at Section 56.4911-5 set forth rules regarding
when communications with members are treated differently from other communications. In
certain situations, communications only with members are not lobbying at all (even if they
might have been lobbying had they been communicated to non-members). In other situations,
communications made only to members become direct lobbying when they might otherwise have
been characterized as grassroots lobbying. The Treasury Regulations also discuss
situations in which communications directed "primarily" (but not exclusively) to
members take on a different character.
Recommendations
We believe that, for the most part, the existing rules should be followed with respect
to websites. Since websites offer different technological opportunities, the IRS could
clarify the following:
Email. If an exempt organization maintains a current list of the email addresses
of its members, in the same way that it maintains a current list of the mailing addresses
of its members, it should be able to send communications only to members or primarily to
members. Charities should not be penalized for saving charitable dollars in using email
rather than postage. The IRS should treat an email just like a letter. A group of emails,
just like letters, are either sent only to members, primarily to members, or not primarily
to members.
List serve. A list serve is analogous to, albeit even more efficient than, a
database that generates mailing labels. If a charity sends lobbying materials only to
members or primarily to members, via list serve or any other media, the existing rules
should apply. Just as with a mass mailing, the factual question is to whom was the
communication sent, all members, primarily members, or not primarily to members.
Limited Access. Charities should be able to provide information to members only,
in limited-access areas of their websites. If a charity exercises reasonable diligence in
offering its passwords only (or primarily) to members and in updating passwords on a
regular basis, then it is providing information only to members, or primarily to members,
as the case may be. We recognize that members could pass their codes onto non-members, but
members could also provide a written newsletter to non-members, and the charity should not
be penalized for either. Again, the IRS needs to encourage charities to take advantage of
new technologies, especially those that save charitable dollars.
Accordingly, for communications sent exclusively to, or primarily to, members, the
current regulations should apply to provide the needed guidance. Because this issue has
been raised, the IRS should provide guidance.
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