A BNA Money and Politics ($$) report addressed a Feb. 20 technical advice memorandum (TAM 200908050) discussing whether a 501(c)(3) organization had intervened in a political campaign by including partisan content from an affiliated 501(c)(4) on its website. The Internal Revenue Service (IRS) concluded that since every page of the site contained the 501(c)(3)'s banner logo, including those paid for by the 501(c)(4), the organizations had engaged in a joint communication. The 501(c)(4) site had candidate questionnaires and endorsements (with the banner of the (c)(3)), and therefore the 501(c)(3) had intervened in a political campaign by distributing campaign endorsements. The IRS's position was based on the facts and circumstances.

"While it is perfectly logical for a 501(c)(3) organization to link to its related 501(c)(4) Web site from its home page, 'you should recognize that the two are in fact separate organizations with their own communications, and once you start combining them they become a combined communication,' Judith Kindell, an Internal Revenue Service senior technical adviser in the exempt organizations area, said."

Is this now an opportunity for the IRS to issue rules on what exactly constitutes political campaign intervention? According to Marcus Owens, an attorney with Caplin & Drysdale, the IRS "could at least come up with guidance that would address speech during worship service that would clear up questions of inferential intervention—when a religious leader makes statements from the pulpit, which imply support or opposition to a candidate, without expressly saying so."

But then there is the question of whether some groups want the facts and circumstances test, because it allows groups to test the waters more as to what they can and can not do. "Kindell's response was to ask whether the sector really wanted a facts and circumstances test—or rules." According to the BNA article, Senator Charles Grassley's (R-IA) tax counsel suggested there could be more inquiries into the nonprofit sector, particularly religious organizations, in the Form 990 filings. Meanwhile, the IRS is requesting comments on the on the redesigned Form 990. The IRS is also seeking comments on how the Exempt Organizations site can be improved, and on an academic program for institutions that offer degrees related to the nonprofit sector.