Part Two of a letter to the IRS from OMB Watch in regards to internet use and exempt organizations. Suggested Action Clarification of the tax law relating to nonprofit advocacy on the Internet can help clear up confusion and encourage continued development in the ways nonprofits can use Internet technology. However, such clarification should not restrict ongoing development by being overly specific or creating a layer of oversight that does not exist for other forms of communications. These objectives can best be met by the following actions:

• The IRS should not propose new regulations, but instead issue guidance only when it is needed in specific situations. The use of examples and safe harbors can be a very helpful way of guiding exempt organizations in their Internet activities, without stripping them of the flexibility needed to expand the usefulness of the Internet.
• It is not necessary to address all issues raised by exempt organization use of the Internet at once, or deal with every conceivable issue. Instead, the IRS should take an incremental approach, addressing major issues as they arise basing its action on consistent principles.
• The unique nature of the Internet should not result in a separate set of rules that would increase the already significant administrative burden imposed on nonprofits involved in advocacy work. Presumptions should not be applied in a way that discourages widespread use.

IRS efforts should concentrate on areas of exempt organization activity that can give rise to fraud and abuse, such as on-line solicitation practices. This protects the public and legitimate nonprofit organizations. Advocacy activities, including legislative lobbying and voter education activities do not raise similar concerns. On the contrary, they involve free speech with the highest degree of First Amendment protection. These suggested actions are consistent with the position taken by the Treasury Department. In a speech to the 13th Annual Institute on Current Issues in International Taxation at George Washington University, Micheal Mundaca, a senior economic advisor on e-commerce, said traditional tax concepts can be applied to electronic commerce issues. "We do not at this point see any need for a wholesale re-examination of the fundamental concepts that have served us well to this point."21 The same principle applies to the nonprofit sector. IRS Questions Our answers to these questions are guided by the considerations noted above, our own experience and input from nonprofits that responded to our online survey about this Request for Comments. Three questions caused particular alarm among survey respondents: those addressing use of links, whether a web site should be treated as a single publication and attribution of statements made in online discussion groups. As a result, we suggest that the IRS consider these areas most in need of a least restrictive approach in applying current laws and regulations. 1. General Issues A. Does a website constitute a single publication or communication? If not, how should it be separated into distinct publications or communications? Treating a web site as a single publication would be inconsistent with the constitutional, policy and practical considerations set forth above. The definition of a "web site" is not clearly established, and the variety of ways exempt organizations structure and use their web sites defies easy categorization. For example, our servers host several other "sites"22 that each include their own documents, links and other features. A practical approach would be to treat web sites as structural entities rather than as communications. This would be consistent with the Reno case, where the Supreme Court said the web is "comparable, from the readers' viewpoint, to a vast library including millions of readily available and indexed publications and a sprawling mall, offering goods and services." This analogy can be extended to web sites, which also contain a vast amount of information that is indexed, searchable and presented in separate documents in separate sections. It is also consistent with the IRS Large and Mid-Size Business Division view comparing web sites to billboards. Robert Rible, a senior Treasury official, said, "A Web site can be considered a similar asset [to billboards], in that the basic Web site design may endure from year to year, even though the contents on the Web site may change weekly, monthly, or annually."23 The determination of what constitutes a "publication" should not be technology driven. The web is only one way exempt organizations communicate. Instead, the nature of the content from the readers' point of view should be the factor that determines how a web site and its contents are treated. There is huge variety in the ways exempt organizations structure their web sites. Not all web sites are available to the general public. Nonprofits have internal sites, known as intranets, that are available only to staff and/or members. There are also extranets, which use web technology to provide virtual workspaces to registered users. An exempt organization can host a site for another organization as a service, without any intent of publishing the information as its own. Many groups do not construct or manage their own sites, but pay an outside provider to provide space on a host server machine where multiple websites are housed. As a result of this wide range of web site design and structure, no one test of what constitutes a "publication" can be applied to all nonprofit web sites without inhibiting innovative and extensive use of Internet resources. Instead, the IRS should apply a flexible standard that allows exempt organizations to develop their own policies for a reasonable separation of web site files into separate publications. The IRS can provide examples of factors nonprofits should take into consideration in development and implementation of these policies. These factors could include the individual sections of a site, whether or not the organization has published a print version of a document, how it appears to the reader, how the web site is organized into sections, the names and titles given to documents and whether registration or subscription is required for access. This approach is consistent with IRS regulations governing recordkeeping24 and has the following benefits:

• Allows nonprofits to develop systems that reflect their size, resources, activities and purpose;
• Recognizes the diversity of web site structures and uses by exempt organizations;
• Allows for future development of web site technology applications;
• Does not create rules for web based publications where there are no parallel rules for print publications;
• Protects the full exercise of free speech on the Internet by exempt organizations.

IRS action on this issue could have an enormous impact on charities that use their web sites for mixed purposes, including legislative lobbying. For example, OMB Watch provides a service for our site visitors that allows them to send e-mail messages to their Members of Congress. This service is available directly from our homepage, through a button labeled "Activist Central", which is served by an outside computer. The visitor is free to write about any subject, and there is no suggested content, editing or censorship by OMB Watch. We also use our web site to publish our newsletter, The OMB Watcher25 , and research reports, information and analysis relating to our work. As an organization that has elected the expenditure test, we track and analyze the portion of our web site used for legislative lobbying, as well as the staff time that goes into generating lobbying communications. Given the complex nature of our site, it is hard to imagine a specific set of criteria defining separation of a web site into documents that could be broadly applied without being forced into artificially limit our use of the Internet. However, we can establish a clear, consistent methodology based on reasonable, broad factors that can be enumerated by the IRS. B. When allocating expenses for a web site, what methodology is appropriate? Any reasonable expense allocation method is appropriate for determining costs associated with web sites. The principle that one size does not fit all clearly applies to this issue. Any more detailed standard would burden web site use with a greater degree of regulation than is imposed on print publications. This approach is also consistent with the current standard in the tax code and regulations relating to lobbying by charities and unrelated business activities.26 Nonprofits' costs associated with Internet and web site activity vary considerably. Some costs are readily identifiable and others are not, depending on an organization's size, structure and resources. The IRS has provided examples of reasonable cost allocation methods in its regulations pertaining to legislative lobbying,27 but none of these are directly applicable to web sites. The examples based on newsletters have some similarities, but web sites differ significantly. The IRS can provide further examples to indicate what a reasonable method for allocation of expenses for a web site might be, and what factors should be considered in establishing a system. Any action beyond that creates a more stringent standard for web sites than exists for other forms of communication, contrary to case law and public policy. Reasonable allocation methods must be simple and easily implemented, so that the cost of tracking and allocating web site expenses does not exceed the cost of the activity itself. As Commissioner Mason noted in his Senate testimony, "Marginal costs are so low on the Internet that users do not normally attempt to account for the volume of use (speech) except in the largest increments and, even then, usually on an aggregate basis. Once an appropriate connection is established, there is no usefully measurable cost difference between sending a single e-mail message and 1,000 identical messages."28 C. To what extent and by what means should an exempt organization maintain the information from prior versions of the organization's web site? Nonprofits are required to keep records that reflect their activities and expenses. Treas. Reg. 1.6001-1(c) and (e) specify that an organization's method must be reasonable, but does not require any specific methodology or standard. This regulation is sufficiently broad to incorporate web sites. Any more detailed standard would impose a more stringent archiving standard on web sites that exist of other forms of communication by nonprofits. As stated above, this result would be contrary to a recognized public policy of maximizing the Internet as a means of free expression. Individual nonprofit organizations should be able to determine the most appropriate means of archiving their web site information, and the extent of those archives. They should also be free to adopt a system that is integrated with their overall archive policies. A great deal of flexibility is needed, as systems of archiving web-based communications are still in development. As noted above, not even federal agencies have a consistent archiving policy or requirements for standard reporting of web site contents. D. To what extent are statements made by subscribers to a forum, such as a listserv or newsgroup, attributable to an exempt organization that maintains a forum? Does attribution vary depending on the level of participation of the exempt organization in maintaining the forum (e.g., if the organization moderates discussion, acts as editor, etc.?) This question is one that has caused a great deal of concern among nonprofits, who fear statements of others over which they have no control could be attributed to them and endanger their tax-exempt status. The IRS should make it abundantly clear that statements made in online forums are not attributed to the forum sponsor unless it is:

• made by someone in their capacity as a representative of the organization; or
• specifically endorsed by the organization.

This approach allows the IRS to distinguish between types of e-mail lists within the nonprofit sector. There are many different kinds of groups currently being used, including invitation only groups, those open to the general public, internal staff and/or board groups and project based lists. There are moderated and un-moderated groups. For example, OMB Watch has an internal staff electronic list that allows posting of schedules, staff meeting agendas and other announcements. It can also be used to send electronic documents to the entire staff. Our Community Education Center is involved in a long-term research project with two outside partners, a university and another nonprofit organization.29 We host a listserv for project participants that helps manage project tasks and timetables, as well as share documents and databases. That group is closed to persons not involved in the project. Another discussion group, NPTalk30 , is open to the public. NPTalk provides daily updates on resources related to nonprofits' use of technology, as well as providing a forum for those interested in how nonprofits utilize information technologies in their public policy initiatives. Nonprofits utilize different levels of moderation in their discussion groups, depending on their tax-exempt status and their purpose in hosting the site. For example, NPTalk is moderated by OMB Watch staff, who control for relevance and screen out inappropriate messages or those intended for individuals. Similar items are grouped or where there are a large number of messages on the same topic, representative samples are posted. Statements made by OMB Watch are clearly identified. Our purpose in providing this forum is to allow nonprofits an opportunity to freely share information and opinions about use of the Internet and technology for the sector's public policy work. It is not to generate material that we adopt or support as our own. Strict or overly specific attribution rules could severely constrain our ability to operate discussion groups and the chill the speech of participants. The least restrictive approach the IRS can take is to apply current rules for off line forums. These rules recognize the important role nonprofits play in providing members of the public with an opportunity to be heard. Speakers participating in radio talk shows, public lectures and debates or in college newspapers are free to express their opinions without having their statements attributed to the sponsor.31 The same principle applies to Internet based speech. 2. Lobbying and Political Activities A. What facts and circumstances are relevant in determining whether information on a charitable organization's website about candidates for public office constitutes intervention in a political campaign by the charitable organization or is permissible charitable activity consistent with the principles set forth in Rev. Rul. 78-248, 1978-1 C.B. 154, and Rev. Rul. 86-95, 1986-2 C.B. 73 (dealing with voter guides and candidate debates)? Information about someone who is a candidate for public office that appears on a charity's web site should not be considered prohibited intervention in a political campaign unless there is a clear indication of intent to support or oppose that candidate. The facts and circumstances test currently applied to non-Internet communications is vague, and often has a chilling effect on charities' decisions on whether or not to get involved in voter education activities. The challenge for the IRS is to provide guidance that clarifies what facts and circumstances violate the ban in Internet communications without creating a dual standard between the Internet and other mediums, and without aggravating the vagueness problem. The Reno court noted the definitions of "indecent", "patently offensive" and "in context" in the Communications Decency Act were vague enough to create fundamental constitutional problems, raising both First and Fifth Amendment concerns. The lower court found that the unique nature of the Internet aggravated the vagueness of the statute. The facts and circumstances test applied to voter education activities for charities has similar problems. A charity cannot always know with reasonable certainty what facts and circumstances could be applied to a voter education communication, whether made on the Internet or not. Therefore, any clarification of what facts and circumstances constitute prohibited intervention in political campaigns should address all forms of communication, not just those made on the Internet. IRS guidance is needed to clarify what does NOT constitute intervention. Such guidance should state that any communication that would be permissible in print is also permissible on the Internet. The IRS can extend the principles in Revenue Rulings covering candidate debates and forums and voter guides to Internet versions of these activities.32 Extension of the principles contained in these rulings should avoid requiring specific procedures and forms of presentation, which could inhibit the full development and use of the Internet for voter education purposes. Given the widespread availability of the Internet and the potential for increasing voter awareness of issues and candidates' positions and qualifications, the IRS should instead make it clear that charities perform a public service when they undertake these efforts. The FEC has reviewed factors for determining whether voter education web sites are nonpartisan, and allowed both nonprofit and for profit entities to use websites for voter education purposes when candidates are treated equally and not rating or evaluation of candidates in made.33 Charities should be able to safely sponsor online candidate forums that take advantage of the web's flexibility. The format of these forums could vary significantly from those held in real time and central physical locations. These forums should treat all candidates equally in terms of space for content and prominence of information, measured from the point of view of the reader. Visitors should be able to select and explore information on candidates and issues that interest them, correspond with candidates and submit questions. Audio and visual files of candidate statements can be stored, allowing more people access to candidates than would be possible in a single real time event. Voter guides and legislative scorecards are also valuable sources of information for voters. The Internet has the potential to greatly increase citizen access to this information, since voter guides can be sent by e-mail, shared in discussion groups and posted on web sites. It makes sense for charities to publish this information during the election season, since that is when public interest is highest and the information is most relevant. More flexibility is needed to allow charities to provide this information than is currently suggested in Revenue Rulings, whether the information is published on or off line.34 For instance, timing release of legislative scorecards to coincide with an election is considered a fact and circumstance indicating intent to intervene in the election process. A past track record will help rebut this presumption, but this only discourages organizations that have not previously produced scorecards from doing so. The safe harbor on scorecards limits rating of legislative voting records to communications to an organization's members. Since web sites postings are available to the public, charities are discouraged from posting legislative track records on issues that concern them unless they use cumbersome procedures to establish member only pages on their web sites. This not only imposes an unreasonable burden on charities, but denies voters access to information that is useful in helping them make decisions. It is logical to assume that web site visitors are interested in voting records relating to the issues that led them to a charity's web site. They should not be deprived of this information or required to wade through a laundry list of assorted issues in order to find the records that interest them. It is especially important for the IRS to indicate that it will take a least restrictive approach in this context, since a finding of intervention in a political campaign can lead to the equivalent of the death penalty for charities- revocation of tax exempt status. As with the criminal penalties involved in the Reno case, the severity of the sanction and its devastating consequences make the vagueness problems associated with the facts and circumstances more problematic. B. Does providing a hyperlink on a charitable organization's website to another organization that engages in political campaign intervention result in per se prohibited political intervention? What facts and circumstances are relevant in determining whether the hyperlink constitutes a political campaign intervention by the charitable organization? OMB Watch believes that links are part of the structure of the web, and should not be treated as content. A link is merely a shortcut from one url to another, saving the visitor to a web site the trouble of retyping or cutting and pasting a new address into their browser. They are a convenience for web users. Since links are structural in nature, they cannot imply endorsement or adopt content in the linked site absent an express statement of support on the host site. Under this approach a link to a candidate's web site cannot in and of itself be considered an intervention in a political campaign. The interactive nature of the Internet brings a new dynamic into the facts and circumstances test, since a visitor to a website can choose whether or not to view information on the other side of a link. If the visitor chooses not to click on the link, they only view the description of the url, or the url itself, and not the content it represents. The lower court in the Reno case noted that, unlike broadcast media, the "risk of encountering indecent material by accident is remote because a series of affirmative steps is required to access specific material." The same principle applies to links to candidate web sites. The FEC recognized this principle by changing its policy on links.35 Initially the FEC took the position that links to candidate web sites constituted campaign contributions and endorsements. However, after examining the context of links, the Commission reversed itself, finding that links to all candidates on nonpartisan pages or made as standard practice indicates a nonpartisan purpose. Commissioner Mason has said, "My individual view is that in proceeding further regarding links, we should simply disregard the link per se and focus on the placement of a link or the message it is embedded in."36 This is a reasonable, practical and least restrictive direction that the IRS should follow. This approach is the only one that provides the flexibility needed for full development of voter education via web sites. It avoids artificial limits on information that can be made available to the public and increases the availability of nonpartisan information. In an era where the influence of money in campaigns has reached record proportions and caused well justified concern, it would be counterproductive to threaten charities with loss of their tax exempt status because of links to the web sites of candidates or political parties. The presumption should be that a charity's link to a candidate is for educational and informational purposes, unless the charity makes a clear statement adopting the information in the site as its own, or demonstrates through content on the site that it is endorsing or opposing a political candidate. OMB Watch makes extensive use of links for a variety of purposes. We link to our own documents posted on our web site, including our newsletter, research reports and updates. We also link to government documents and web sites, organizations mentioned in our materials and background information on issues we work on. These links are embedded in e-mail messages, the newsletter, reports posted on the web site and lists of links provided as a resource for visitors. Our links to Congressional sites do not imply support or opposition to re-election of any member of Congress. They are aimed at educating the public about issues that happen to be covered on an elected official's site. The Regulatory Matters section of our site includes a section on Citizens for Sensible Safeguards (CSS), a coalition of over 300 public interest organizations representing a wide variety of interests. CSS works to preserve public protections that have made workplaces safer, the environment cleaner, communities healthier, and our society more accessible. Our web site lists all members of the coalition, and each listing also constitutes a link to that organization.37 Not all coalition members are charities, but our interaction with these groups is limited to charitable purposes. The fact that a non-501(c)(3) member might have partisan electoral information somewhere on its site should not preclude OMB Watch from giving interested visitors to the CSS page the opportunity to learn more about regulatory issues by visiting the sites of CSS members. During the 2000 campaign OMB Watch researched candidate proposals that could affect nonprofit organizations. Both major Presidential candidates proposed faith-based initiatives that would increase participation of religious organizations in providing human services under federal grants. Links to pages on the campaign websites that described these proposals were made strictly for informational and educational purposes, and implied no support or opposition to either candidate. This varied and extensive use of links is only the tip of the iceberg for link uses by the nonprofit sector. These uses should be encouraged, so that nonprofits can continue to find new ways to take advantage of them. Unless a link goes beyond a description of its destination (such as the name of an organization or title of a document), the content of the linked site should not be attributed to the host absent specific adoption or endorsement. If more information is included, there should not be a presumption that the content of the linked site has been endorsed or adopted by the host. Instead, the placement and context of the link should be considered before a determination is made. It should also be clear that links to sites involving candidates in other capacities, such as their place of business or employment, are not related to the campaign unless a clear statement to the contrary is made. An overly specific or inflexible approach to this issue could result in widespread, unintended consequences. One of our survey respondents said:

"We are quite concerned about the notion that linking to something constitutes endorsement and that the linking organization is responsible for the contents of the linked-to sites. We might highlight the use which an advocacy group made of their web site or of email, etc. as an example of an innovative use of technology without in any way advocating for the positions of the group, let alone other positions they may have advocated on their web site or other communications. Trying to restrict linking in this way is antithetical to the spirit and the core functionality of the web"

C. For charitable organizations that have not made the election under section 501(h), what facts and circumstances are relevant in determining whether lobbying communications made on the Internet are a substantial part of the organization's activities? For example, are location of the communication on the website (main page or subsidiary page) or number of hits relevant? Since no specific guidance has been issued to inform charities that do not elect to use the expenditure test to measure their legislative lobbying activities, the IRS should not create special rules for the Internet in this context. If the IRS feels guidance is needed, it should address all forms of lobbying activity and communication, not just those made via the Internet. An effort of this type would help address the constitutional concerns on vagueness raised and discussed above in 2A. Because nonprofit uses of the Internet vary so widely, and levels of technological capabilities are uneven, specific tests that require charities to track hits to the legislative lobbying portions of their web sites or design web pages in a way that achieves particular placement requirements would be contrary to the guiding principles we have suggested. The IRS should avoid imposing more restrictive rules for Internet communications and activities than exist for their non-Internet based counterparts. D. Does providing a hyperlink to the website of another organization that engages in lobbying activity constitute lobbying by a charitable organization? What facts and circumstances are relevant in determining whether the charitable organization has engaged in lobbying activity (for example, does it make a difference if lobbying activity is on the specific webpage to which the charitable organization provides the hyperlink rather than elsewhere on the other organization's website)? We believe the same principle that applies to a charity's links to candidate web sites should apply in the context of legislative lobbying, since the links are structural in nature. They lead to content, but do not contain it. Therefore, a link from a charity to another organization that engages in legislative lobbying should not be considered lobbying by the charity unless it makes a statement endorsing or adopting the lobbying communication on the linked site. Since the charity would have no control over the contents of the linked site or notice of changes made, it would be unfair to presume such a link establishes an intent to lobby. Any other approach could result in vast amounts of unrelated information on linked sites counting as lobbying by the host site. Since lobbying by charities is limited by law and penalties can be imposed for exceeding the limits, inclusion of another organization's web based lobbying with the charity's own lobbying activities could result in severe and artificial constraints on the amount of lobbying they do. This is contrary to the intent of Congress in passing Section 501(h) of the tax code and denies the charity full exercise of its First Amendment rights. E. 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"? We believe that the best approach is to treat separate documents on web sites as distinct communications for the purpose of applying the regulations governing lobbying by charities that elect the expenditure test under Section 501(h). This avoids creation of a separate standard for web based lobbying communications, and allows the IRS and electing charities to continue to apply the clear definitions and guidelines provided in Section 4911 of the regulations. It also allows for maximum use of the Internet, where the opposite approach would discourage posting of documents that might count against the grassroots lobbying limit. Since grassroots lobbying is limited to a quarter of a charity's lobbying budget, the impacts of an overly restrictive rule would be harsh and inconsistent with free speech rights and established public policy. Using our suggested approach, a charity would consider a communication on its web site to be grassroots lobbying only if it is available to the general public, refers to specific legislation, expresses a view regarding that legislation, and:

• the communication contains an express statement urging the reader to contact legislators; or
• the name and contact information (including an e-mail address) for a legislator is visible in the body of the document; or
• the means of contacting legislators, such as a link to an e-mail address, is included in the body of the document, or
• the document refers to legislators that are on committees or subcommittees that will vote on the legislation or are opposed to or support legislation they will vote on.38

This approach allows charities to provide "contact your legislator" services to their web visitors without converting material that was never intended for lobbying purposes into grassroots lobbying communications. The charity should have the flexibility to place access to such services in prominent and convenient places, such as its homepage or in button bars that are repeated throughout the site. It also does not discourage charities from providing contact information for public officials as part of its public education function. The Best Links section of our web site provides users with access to a variety of government entities and officials at the national and state level, as well as host of other information sources.39 The government links include THOMAS, which takes users to the U.S. Congress. Even though THOMAS provides links to individual members of Congress, OMB Watch has no lobbying purpose in providing this link. The same principle applies to our "Activist Central" service, which is displayed throughout the site as part of the features available to users. It not intended to attach to a document that refers to and expresses a view on specific legislation any more than our other navigation bars. Its presence should not convert any discussion of legislation into grassroots lobbying. If that were the case, we would be discouraged from providing the "Activist Central" service because of the low grassroots lobbying expenditure limits and the impact of the rules on allocation of costs for mixed communications.40 The IRS should avoid technology driven, mechanical approaches to this issue, such as counting the number of clicks between a call to action and references to legislation. The number of clicks required to move from a discussion of legislation to the call to action can vary within the site, depending on the starting point. As a result, a test based on clicks is impractical and would be impossible to construct in a way that does not impair charities' abilities to design the structure their websites. It is much easier to apply existing regulations to e-mail communications and discussion groups, since the charity is the sender and can control its e-mail lists and determine what proportion of the recipients are members. E-mail messages with the requisite elements for lobbying communications defined in the regulations are lobbying communications. The expenses associated with producing the message and the costs of sending it are lobbying expenses. F. 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 listserv communication by the organization constitute an appearance in mass media if it is sent to more than 100,000 people and fewer than half of those people are members of the organization? This question is relevant to the paid mass media regulations that counts certain paid advertisements as grassroots lobbying expenditures even if they contain no call to action, if other requirements regarding timing and content are met. The regulation is only triggered if the charity pays for advertising in specified mass media outlets. Publication of a web page cannot be considered an appearance in the mass media for several reasons. First and foremost, the regulation defining paid mass media advertisements specify the following forms of communications: television, radio, billboards and general circulation newspapers and magazines.41 The Internet is not listed as a vehicle for mass media communications. To include it, the IRS would have to propose changes to the regulation. Such an action would be contrary to all of the principles we have suggested for guiding IRS application of tax law to Internet activity by exempt organizations. It would artificially stretch a regulation meant to apply to expensive, high entry barrier media to one that is both low cost and widely available. It would negatively impact the First Amendment rights of electing charities. The fact that a charity spends money on its own web site does not convert its postings into paid advertisements. The fact that more than 100,000 people may view a posting does not make the charity a publisher under the regulation's mass media definition, since a web site is not a newspaper or magazine, but a vehicle for distributing publications. G. What facts and circumstances are relevant in determining whether an Internet communication (either a limited access website or a listserv or email communication) is a communication directly to or primarily with members of the organization for a charitable organization that has made an election under section 501(h)? A charity can identify and control people on its e-mail list in the same manner it can identify and control recipients of printed communications. When an e-mail is sent to a large list, the charity simply counts the number of members on the list and determines their proportion in relation to the entire list. The charity must assume that messages it sends go directly to the recipients. There is no way for a sender to control whether or not a recipient forwards a message, or whether or not someone else reads it. However, the same issues exist for mass mailings of printed material, and since no rules cover these situations, special rules for the Internet should not be established. Unless special steps are taken, web sites are available to the general public, and there is no easy way of determining whether or not visitors are primarily members. Small organizations, especially those that do not host their own sites, would have great difficulty in making such a determination. The best approach is not to require nonprofits to determine who is visiting their sites, but to allow them to develop a reasonable method for determining whether or not their web sites are mostly visited by members. Conclusion The Internet has provided exempt organizations with an unprecedented opportunity to fulfill their public interest missions, and given members of the public a convenient and effective way of becoming involved in public affairs. This can only be a healthy development for a democratic society. The IRS can promote and encourage this development by ensuring that exempt organizations are not unnecessarily hindered in their use of the Internet. This can best be done by taking a least restrictive approach to interpretation of existing tax laws as applied to the Internet, promoting consistency with rules for other forms of communication and keeping any Internet specific guidance simple and flexible. This approach will help create a climate where exempt organizations can continue to develop innovative ways of using the Internet to achieve their goals. Yours truly, Kay Guinane Counsel and Manager, Community Education Center OMB Watch Endnotes 21 BNA U.S. Official Says "Traditional Concepts" Still Applicable for Key E-Commerce Issues 22 www.ombwatch.org/files/las, www.investinamerica.org, www.rtknet.org, and www.ombwatch.org/files/npt/nptalk and www.ombwatch.org/a4a 23 16th Annual High Technology Tax Institute, Novebmer 14, 2000, BNA IRS Taking Narrow View of Website Design, Software Implementation Costs, Official Says November 16, 2000 24 56.4911-6 25 www.ombwatch.org/watcher 26 Treas. Reg. 512(a) and Treas. Reg. 56.4911-3-5 27 Treas. Reg. 4911-3 28 See footnote 20 29 The Supporting Nonprofit Advocacy Project. 30 www.ombwatch.org/files/npt/nptalk 31 See Rev. Rul. 66-256, 1966-2 C.B. 210, Rev. Rul. 74-574, 1974-2 C.B. 160, and Rev. Rul. 72-512, 1972-2 C.B. 246, Rev. Rul. 72-513, 1972-2 C.B.246. 32 Rev. Rul. 86-96, 1962-2C.B. 73 and Rev. Rul. 78-248, 1978-1 C.B. 154 33 AO 1999-25 (FEC 1999), AO 1999-24 (FEC 1999) 34 Rev. Rul. 78-248, 1978-1 C.B. 154 and Rev. Rul. 80-282, 1980-2 C.B. 178 35 See MUR 4340, AO 1999-7, 1999-24 and 1999-25 36 See footnote 20 37 See www.ombwatch.org/regs/css/cssmem.htm 38 See Treas. Reg. 56.4911-2(b)(2)(iii) 39 www.ombwatch.org/link/category/0/l 40 Treas. Reg. 56.4911-2(b)(v)(G) 41 Treas. Reg. 56.4911-2(b)(5)