New Hampshire Compels Speech; Micromanages
Additionally, New Hampshire's revised
statute also contains the following new requirements on
Moreover, the state is attempting to
impose these requirements on all nonprofits that mail into
New Hampshire - not just nonprofits incorporated in New
Hampshire - even if their only contact with the state is by
mailing to New Hampshire residents. FSC is sending a letter
to New Hampshire's Attorney General outlining its
constitutional objections to the statute.
Hawaii Ends Nonprofit Registration
FSC has reported widely on Hawaii's
Charitable Solicitation Act. The February 1995 edition of
FREE SPEECH detailed Hawaii's requirement that nonprofit
organizations must have the donor's permission, in advance,
to be solicited. To continue the reform in Hawaii, this
"positive-option" statute should be the next Hawaiian law to
Delawares Harsh New Rules
Violating any of these rules is considered "deception, fraud, false pretense, false promise, misrepresentation, or the concealment, suppression, or omission in connection with a charitable solicitation, whether or not any person has in fact been misled, deceived or damaged thereby" (emphasis added).
The governor signed the bill on July 25,
1996, and the law became effective September 24, 1996.
Paradoxically, pushing for this new burden on nonprofits was
the Delaware Association of Nonprofit Organizations.
Double Sanctions Threaten Nonprofits Under TBOR2
In January 1996, FSC wrote to Senator William Roth (chairman of the Senate Finance Committee) and Congressman Bill Archer (chairman of the House Ways and Means Committee) advising them of the danger, and excessive burden, that double sanctions could have on nonprofits.
Unfortunately, only FSC vigorously alerted Congress to this danger. One nonprofit recently wrote that "the IRS is expected to act swiftly and with force with this new weapon that it has been seeking for years." Now, with the TBOR2 becoming law, double sanctions are a new weapon in the IRS's arsenal.
Additional burdens in TBOR2 for
There is one piece of good news from TBOR2. Volunteer board members now are exempt from tax-related penalties. This section, known as the congressional exemption, frees board members who receive no financial remuneration from the prospect of liability for tax penalties incurred by the nonprofit.
Due to the complexity of the new law,
various organizations have conducted information sessions on
compliance. Nonprofits unsure as to how to comply with the
new law can contact FSC at (703) 356-6912 for references to
technical information. FSC will be draft and file comments
with the IRS in November regarding the anticipated
IRS Charged With Political Harassment
FSC obtained copies of IRS Information Document Request forms to the WJC requiring the nonprofit to provide "copies of all correspondence files for 1995, copies of all documents related to the selection of an investigative reporter and how the topic was selected." As with most nonprofits, WJC believes it is improper for the government to require it to provide copies of every letter it sent or received during the year.
WJC also says a government official
contacted at least one contributor to the nonprofit and told
him his company's government business would be in jeopardy
if he continued to support the nonprofit. More information
on the Center and its fight with the IRS can be viewed on
WJC's site, http://www.e-truth.com.
North Carolina: Nonprofits Responsible for
Once state officials match lists of nonprofits with registered fundraising counsel, some nonprofits may be in for a surprise. A nonprofit's registration in North Carolina could be jeopardized if even one of its multiple fundraising counsel is not registered. Although a fundraising counsel may only advise a nonprofit, and their name never appears anywhere on a mail sent into North Carolina, state law still apparently requires their registration. A nonprofit could have their own license to solicit contributions revoked if one of their counsel did not register with North Carolina officials.
This "back-door" potential punishment for
nonprofits is outrageous. Nonprofits cannot and should not
be held responsible for the activities of their consultants.
Imagine if the same standard was applied to a nonprofits'
lawyers, accountants, plumbers, electricians, etc.
FSC Urges End to Oklahoma Bottleneck
The lawyer retained by the Free Speech Coalition to help on this project, former Oklahoma Attorney General Susan Loving, recently met with an Assistant Attorney General in Oklahoma City and explained FSC's solution: focus on prosecuting fraud, rather than investigating and registering every nonprofit that mails into Oklahoma.
Even if the requirement for out-of-state
nonprofits is not dropped completely, current law allows for
the Attorney General's office to enter into reciprocal
agreements with other states to accept copies of forms filed
by nonprofits in those states (18 O.S. Supp. 1995, Section
552.13). Oklahoma has the opportunity administratively to
drop its archaic registration requirements for nonprofits,
allowing nonprofits to spend more of their contributions on
programs and less on meaningless (and expensive)