An Internal Review Service review of how to apply to Web sites existing laws restricting political , commercial and lobbying activities of tax-exempt groups has raised fears among nonprofits that the review could led to excessive government intrusion and curb free speech, the Associated Press reported Dec. 27.
IRS officials say they’re simply considering whether to modernize laws affecting roughly 1.3 million groups exempt from taxes under section 501(c) of the federal tax code.
Groups covered by section 501(c)3 of the tax code – which accept tax-deductible contributions – can’t take part in political activity and can take part only in “insubstantial” lobbying. The code also regulates income from activities such as advertising, fundraising and issue advocacy.
Some nonprofits worry that the IRS could hold them accountable – and possible revoke their tax-exempt status – for linking their Web sites to political groups or for statements made in Web discussion groups, AP said.
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