• Does new IRS advisory memo change how affiliated nonprofits handle their websites?

  Filed under Uncategorized
  Feb 28

  Last week, the IRS released T.A.M. 200908050 (Feb. 20, 2009). The gist of the memorandum is that the IRS may take a stricter look 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.

  Here’s what we’ve always thought (and remember, 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)… a 501(c)3) and it’s affiliated 501(c)(4) can share the same website so long as corporate formalities were followed. In other words, 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. basically added some details to this. 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 seemed to be a compelling thing for the IRS… more compelling than which entity paid for the communications (endorsements and 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.”

  I’ll address all of this in an upcoming Nonprofit Law Podcast…

  More information – Caplin & Drysdale, IRS Articulates New Standards for Nonprofit Websites

  2 Comments

2 Responses to “Does new IRS advisory memo change how affiliated nonprofits handle their websites?”

1. Nonprofit Law Podcast #52: New IRS Memo on Shared Websites | nonprofit law podcast said on March 8th, 2009 at 8:46 am

   [...] Resources My post at the nonprofit law blog [...]

2. Nonprofit Law Podcast #52: New IRS Memo on Shared Websites (repost) | nonprofit law podcast said on March 8th, 2009 at 1:00 pm

   [...] Resources My post at the nonprofit law blog [...]

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