Nonprofit Law Podcast #52: New IRS Memo on Shared Websites

New IRS Memo on Shared Websites

Download: Nonprofit Law Podcast #52 (mp3, 10:20)

Shownotes

Intro

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501(c)(3)/501(c)(4) Shared websites

• On February 20th, the IRS released T.A.M. 200908050
• Arguably a stricter stance at affiliated 501(c)(3)-501(c)(4) entities sharing websites when the 501(c)(4) is engaged in political activity that is prohibited for 501(c)(3)s.
• What we’ve always thought
  • Caveat – the IRS rarely gives a lot of spot-on advice, so “what we’ve always thought” is based on educated conjecture based on existing precedent
  • 501(c)(3)s and affiliated 501(c)(4)s can share the same website so long as corporate formalities were followed.
  • The (c)(4) can be on the (c)(3)’s website, but there had to be some kind of way for the (c)(4) to reimburse the (c)(3) for using that space.
  • The (c)(4) also had to be the entity making the communications as well.
• The IRS in this T.A.M.
  • The entities involved here had the (c)(4) reimbursing the (c)(3) for the space, but the (c)(3)’s logo and copyright information were splashed all over the (c)(4) page content.
  • That was a compelling factor for the IRS… more compelling than which entity paid for the communications that endorsed candidates and included non-(c)(3) allowable candidate questionnaires.
• Where does this leave us?
  • It does not appear that the IRS is closing to door to shared sites, but it is clear that details matter beyond which group cuts the check for which content.
  • The safest thing would be separate websites altogether – and these days, it’s certainly less of a cost issue to maintain 2 domain names and 2 design schemes than in year’s past.
  • I suspect, although it’s not 100% clear from the T.A.M., that the (c)(3) and (c)(4) could share a domain hosting package so long as they split the costs, and maintain separate websites with separate communications.
  • Linking between the two should still be acceptable under earlier law, but it cannot rise to the level of campaign intervention, so the links are best left as, “we have an affiliated organization and you can read more about that work here.”

Resources

My post at the nonprofit law blog

Alliance for Justice (note, AFJ has a free conference call on the topic this Tuesday, March 10)

Caplin & Drysdale

IRS TAM 200908050 (Feb 20, 2009)(PDF, via Caplin & Drysdale)

Closing

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This podcast provides general information about legal topics but it is not a complete discussion of all legal issues that arise in relation to nonprofits nor is it a substitute for legal advice. This podcast does not create an attorney-client relationship. This is general legal information and the contributors make no warranties regarding the general legal information provided in this podcast , and disclaim liability for damages resulting from its use to the fullest extent permitted by the applicable law.