The IRS vs. Open Source 356
simonstl writes "The IRS wasn't after just the Tea Party, Progressives, or Medical Marijuana: Open Source Software was a regular on IRS watch lists from 2010 to 2012. Did they think it was a for-profit scam, or did they just not understand the approach?"
Valid Reasons (Score:4, Informative)
"These organizations are requesting either 501(c)(3) or 501(c)(6) exemption in order to collaboratively develop new software. The members of these organizations are usually the for-profit business or for-profit support technicians of the software."
The fact that for profit businesses are using open source as a tax break excuse is reason enough for investigation. The IRS wants to collect taxes, not give tax breaks. Of course it would investigate people seeking tax breaks on potentially shaky grounds...
Comment removed (Score:5, Informative)
Non news (Score:3, Informative)
"These organizations are requesting either 501(c)(3) or 501(c)(6) exemption in order to collaboratively develop new software. The members of these organizations are usually the for-profit business or for-profit support technicians of the software."
The fact that for profit businesses are using open source as a tax break excuse is reason enough for investigation. The IRS wants to collect taxes, not give tax breaks. Of course it would investigate people seeking tax breaks on potentially shaky grounds...
Yes, exactly. There are many abuses of 'non-profit' status.
In my entrepreneur ship class, a classmate of mine did a project for a non-profit startup.To make a long story short, she was worried that she wouldn't be able to get investors. The prof assured her that wouldn't be the case because non-profit is just a tax status - you're just limited as to what you can do with those profits. In other words, you can get as rich as you like with a non-profit and make your investors rich too.
People get rich with charities too. That's why if you want to give to charity, do it outside of big national charities - your money will go a lot farther.
Re:Valid Reasons (Score:5, Informative)
The IRS wants to collect taxes...
More correctly: the IRS is required by law (written by congress and signed by the president) to collect taxes and make determinations of status related to taxing.
Re:Open source equates to freedom. (Score:5, Informative)
Please tell me this post is a joke post.
And no-one else was affected because it was a hack made to the source by a developer on a distro few people use. I don't believe that change made it into any of the Debian-based distros.
Yeah, none except for Ubuntu. But that's just a distro that "few people use", right?
http://www.techrepublic.com/blog/opensource/find-and-fix-weak-opensslopenssh-keys-debian-based-linux-vulnerability/210
A recent vulnerability was found in the OpenSSL package as provided by Debian and Debian-based Linux distributions, such as Ubuntu, that broke the effectiveness of the OpenSSL PRNG (Predictable Random Number Generator). This vulnerability caused OpenSSL to generate weak keys for anything relying on OpenSSL, including SSL certificates, OpenSSH keys, and OpenVPN keys. Any OpenSSL-based key generated on a Debian-based system since September 2006 by the openssl, ssh-keygen, or openvpn –keygen commands are vulnerable to this issue.
That you were modded up for your completely wrong post is just another sign that Slashdot is full of morons.
Re:Open source equates to freedom. (Score:5, Informative)
Fraser top 10 (Chapter 3, page 9):
So they seem to be in agreement that Australia, New Zealand, Canada, Hong Kong are freer than the United States.
Re:Open source equates to freedom. (Score:2, Informative)
I'm thinking the "land of the free" sig. is just a whitewash
Hey, man, what do you have against the Belizean national anthem [wikipedia.org]
Re:Open source equates to freedom. (Score:5, Informative)
He's probably just having the knee-jerk reaction that the editors want, and hasn't read the article. Given that it's only about a paragraph or two of actual text, here's all the relevant information:
" Amidst the blacked-out redactions, this turned up on the watch list, page 13:
Open Source Software
These organizations are requesting either 501(c)(3) or 501(c)(6) exemption in order to collaboratively develop new software. The members of these organizations are usually the for-profit business or for-profit support technicians of the software.
There is no specific guidance at this point. If you see a case, elevate it to your manager.
I would guess that the IRS was suspicious of Open Source Software because it figured that it was primarily a profit-driven project. Perhaps they had had some applications that clearly benefited only a single profit-making sponsor, or perhaps they simply hadnâ(TM)t understood the dynamics of open source.
By February 8, 2012, they had added âoeThe software is provided for free, however, fees are charged for support by the for-profit,â and specified a contact for the cases."
Taking a step back to think about what non-IT people think of an organization comprised of for profit businesses and their employees, requesting non-profit treatment...it's not at all surprising for additional investigation to take place. It makes sense for them to want to take time to understand exactly what the organization is doing to avoid approving an organization that may not be for the advancement for the public good, but rather a simple tax-dodge for underlying businesses.
I mean, who would prefer that the IRS hand out tax-exemptions willy-nilly without any judgement?
Re:Malice or Incompetence? (Score:4, Informative)
You'd be surprised.
I do taxes in the early bits of the year, and I've never had a nightmare story about how their clearly legitimate tax return was mangled by incompetent IRS agents. I've had plenty who screwed up and ended up in closer contact with the IRS then they wanted, but nobody who thought the IRS Agents who called them on it were incompetent. You'll note even the anti-IRS Tea Party-guys currently complaining about these BOLO lists eventually got approved. They had to jump through a bajillion hoops to get approved, but they got approved, and none of them sent any extra money to the Feds.
I'm sure it happens, and the IRS does lose in Tax Court with some regularity, but I've personally done 80-100 tax returns and have given tax advice to dozens of other people who were having trouble with the IRS, and I personally have never encountered someone who had a legitimate gripe against the IRS. Plenty have had legitimate gripes against their tax preparers, but none against the IRS.
In this case it actually seems like it's a search for competence that causes open source applications to be sent up to management. Level 1 guys in the IRS aren't hired for their ability to tell legitimate open source projects from Tim Cook's Advanced Tax Avoidance Strategies, so open source applications get sent to managers who send them to guys who are trained to tell that difference.