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?"
Open source equates to freedom. (Score:5, Insightful)
Which is exactly why the U.S. government is against it.
Liberty (Score:5, Insightful)
They probably know that people with libertarian/anti-authoritarian views gravitate towards such things, much like how they tend also to support groups like the EFF. To the federal government, that's not much better than being a member of Al Qaeda...
Re:Liberty (Score:2, Insightful)
Tinfoil hat? Check.
At the Risk of Disgust for Defending the IRS ... (Score:5, Insightful)
Did they think it was a for-profit scam, or did they just not understand the approach?
I'm very pro-open source but it appears that the fear from the Internal Revenue Service was that companies were figuring out ways to dodge taxes by moving developers to 501(c)(3) or 501(c)(6) organizations and then paying them in "donations" after the software was released thereby avoiding some federal and state income taxes to what normally would be their regular employees. Basically you would be setting up an educational or scientific group of your own developers, you would be able to pay them less due to 501(c) income tax leveraging and at the end of the day you'd still get your commercial software designed for you under an Open Source license. This, of course, by and large does not happen nor is there any evidence of it (I'd imagine very few open source developers even get paid for it) but was it really so wrong for the IRS to watch out for it? Even if they're not engaging of what the IRS would call "non-linear compensation" you might still be able to pay developers as employees of the 501(c) their regular wages with far less tax.
I mean, are we going to sit here and bitch and moan about corporate tax avoidance [slashdot.org] in our country and then freak out when the IRS investigates if Open Source groups are being abused in the same manner?
Is it really that wrong for the IRS to identify points of abuse and to look out for them? My gut says they should be able to identify and investigate but perhaps I just can't imagine how they would abuse that ability if they present a legitimate reason. Seems like they had a legitimate reason to watch for unlawful activity, unless I'm missing something?
For-profit business aspect (Score:5, Insightful)
My guess is it's the fact that most of the membership in those open-source projects are developers for for-profit businesses. The IRS would be on the lookout for businesses hiding their normal development activity over in a tax-exempt organization. I note that the IRS position is "no particular advice, look it over and punt it higher up the food chain if you can't make a clear call on it". Which I think is the standard procedure for anything. I'd rather have that in place, when a Tier 1 bureaucrat makes a wrong call it's easier to argue "They admit it's not clear here and here, according to IRS procedures they should've sent it up to a higher level to decide." as opposed to "They made the wrong call.".
Tax dodge (Score:5, Insightful)
Well, TFA says:
so maybe the IRS was concerned that open-source consortia are some kind of tax dodge.
Re:Tax dodge (Score:3, Insightful)
Nonprofit status in general is a tax dodge. It's one of the many reasons people use them. The real question is, why haven't we switched to a consumption tax to divest the IRS's ability to actually abuse their power to this extent?
Re:Liberty (Score:5, Insightful)
I'll let you in on a little secret:
Libertarians are not pro-liberty.
Re:At the Risk of Disgust for Defending the IRS .. (Score:4, Insightful)
I wonder if the abuse would be mitigated if the software were released publicly while under the open source license. Evade taxes, taxpayers get access to your product.
Would still be a possible tax loophole if you develop software that is of use to you and you only, with no secrets that can be discovered from the software, and you release it as "open source" fully knowing that nobody in the world except you is interested in it and can use it.
Re:Open source equates to freedom. (Score:5, Insightful)
Why would the freest (sic) country in the world...be against it?
Yeah, I'm kind of not too sure I'm buying into the grade school rhetoric anymore. When I hear words like "traitor" bandied about for people who are obvious whistle blowers (Snowden) and fed. orgs. like the IRS have been snooping on random citizens I'm thinking the "land of the free" sig. is just a whitewash. In the words of Johnny Rotten the US has become just another country.
Its obvious to me that the higher-ups who approved or created these directives to start whole-sale spying on citizens are so backwards and cloistered in their mindset they most likely believed that anyone who stood up for anything was grist for the mill. "Free & open source software? They might be terrorists." Sure. I get it.
Open Source is similar to the Tea Party ... (Score:5, Insightful)
I realize many of you are flipping out at the comparison to the Tea Party. Don't let politics blind you. While political beliefs may differ wildly there are these shared basic concepts. These concepts are inherently a threat to the government/corporate status quo.
Re:Open source equates to freedom. (Score:2, Insightful)
Erm, yes it does. How is asking for and getting a key in MS OSes and leeping it for at least 13 years anything like the idea that they infiltrated Debian and convinced both the package maintainer and upstream provider to engineer guessable keys? Why did they stop at Debian when they had the co-operation from upstream OpenSSL package? Maybe, just maybe, it was just a mistake.
Original AC said it makes it harder and qualified it presumably because they knew about the OpenSSL issue. It clearly does make it harder and to say that it doesn't doesn't make any sense.
Re:Open Source is similar to the Tea Party ... (Score:2, Insightful)
I wasn't aware open source was inherently against Mexican immigrants or black presidents.
Re:Liberty (Score:4, Insightful)
Nowadays 'libertarian' has a much different meaning then even 10 years ago.
10 years ago most people identifying as libertarians opposed gay marriage because they thought the government shouldn't be in the marriage business, identified as pro-choice (or at least pro-birth-control), opposed Social Security on principle, thought a "free country" could not have a religion, strongly opposed all regulations against gay sex, opposed all forms of anti-discrimination legislation that apply to the private sector, etc.
Nowadays 'libertarian' means conservative who is choosing not to talk about social issues. Paul Ryan, who is strongly pro-life, opposed decriminalizing gay sex, thinks the US is a Christian Nation in a very real and legally binding sense of the term, supports many forms of anti-discrimination law, etc. Basically what he means when he says "I'm a libertarian," is "I really, really REALLY hate Obamacare."
This evolution of political terms isn't unusual. "Republican," for example, means completely different things to my cousins from Canada, Ireland, Sweden, and Florida. It just happens. If you were a libertarian prior to Dubya temporarily convincing everyone conservative = batshit stupid in the dying months of 2008 your options are a) become conservative in the sense of the term that applied in 2008, b) make up a new word for what you are, or c) try to convince everyone that 30% of Americans are evil for stealing your word.
Re: Open Source is similar to the Tea Party ... (Score:2, Insightful)
treating someone as equals does not mean you hate them.
Re:scrutiny is normal (Score:5, Insightful)
Under what law are they not allowed to do triage?
Hell, how can they not have these lists? They are tax geeks. They have no clue as to what to look for in an application to find a fake non-profit. It's true they don't have the right to target solely the members of one party or the other, but the practical options are a) build up a list like this so they know who to hassle, b) hassle everyone (which would cost a lot of money), and c) let everyone be a non-profit.
Let me put it to you this way:
If Microsoft could make some fake open-source license, grant it to a fake non-profit, and then spend $10 Billion on Windows 9, and get a massive tax write-off because it all counts as a charitable donation would you be happy?
Because Microsoft, Apple, Google, etc. would totally do that shit if they thought they could get away with it. Having a guy who actually knows something about open source actually read all these applications, so they know who to give a hard time is a Very Good Idea. Read the article. This is not "we deny open-source applications," it's "we send open-source application to this one guy, who is a manager."
Re:Open Source is similar to the Tea Party ... (Score:1, Insightful)
I wasn't aware open source was inherently against Mexican immigrants or black presidents.
Neither is the Tea Party: Watch Herman Cain Deliver the Tea Party Response to the State of the Union [youtube.com]
That would be former presidential candidate Herman Cain who was strongly supported by the Tea Party.
Re:Open Source is similar to the Tea Party ... (Score:3, Insightful)
Because Social Security wasn't money I earned, taken against my will from my paycheck, to be given back to me later.
Re:Open source equates to freedom. (Score:5, Insightful)
and fed. orgs. like the IRS have been snooping on random citizens
They weren't random. They were specifically targeted for their political, social and economic beliefs, which is far, far worse than random.
Re:Open Source is similar to the Tea Party ... (Score:1, Insightful)
Don't bother. The leftists here have their talking points. Pointing out that the Democrat party was the party that founded the KKK, created the Jim Crow laws, created gun control specifically to keep blacks from arming and protecting themselves, founded Planned Parenthood as a way to euthanize the black population and had a grand wizard of the KKK in the Senate up to just a few years ago. Nevermind that the Republican party was the part of Martin Luther King. That it was the Republican party that fought a civil war that helped to free American slaves. That it was the Republican party that fought for civil rights for minorities from the 40's all the way to the present.
No sir, leftists have their new plantation. Any black person, such as Herman Cain, Clarence Thomas, Condoleeza Rice, Colin Powell, Alan West or any of the many others who go against their Democratic talking points are "working for the man" and not "real" black folks.
Liberalism is a mental disease. Its the ultimate form of projection where they can do no wrong, everyone else is evil and free speech is only ok when you're saying something they agree with. If you aren't a liberal you're "stupid" or "ignorant" or "crazy."
I'm so sick of the fucking debate with them it's beyond words for me to express. They have pushed people so far that I honestly believe a civil war is coming. The takers have run out of other peoples money and the workers are fed up. With all the new scandals, all someone needs to do is light a match to this powder keg.
Re:Liberty (Score:1, Insightful)
You're so fucking full of shit it's ridiculous. I can't even begin to take you seriously with this crap. All I can say is "fuck you" for trying to redefine terms. Want to know what the LP stands for? Go to their god damned website and read for 10 seconds. Paul Ryan is a libertarian on economic issues and nothing else. He isn't a part of the libertarian party, nor has he ever been.
So again, FUCK YOU with your bullshit. Assholes like you trying to constantly move the goal post ruin the political discourse in this country. I happily treat you witht he contempt you deserve. Fucking weasel.
Re:Open Source is similar to the Tea Party ... (Score:5, Insightful)
That's the thing about Venn diagrams: there's the part that overlaps, and there's the part that doesn't. For those dim enough to swallow whole the media narrative about the Tea Party, let me spell it out: the beliefs of Open Source and of the Tea Party overlap where "we don't need a central authority for this" is concerned, however much or little they may overlap elsewhere.
Powerful central authorities predictably to frown on groups that hold "we don't need a central authority for this" as a key value, regardless of what their other values might be.
Re:Open source equates to freedom. (Score:5, Insightful)
That's what I've been telling people since the beginning. The IRS is/was in an impossible position. If it didn't investigate every group which applied for a tax exempt status, then people would whine about them not doing their job.
Now, during the height of a frenzied presidential election, they go the extra mile to make sure those who are applying are truly worthy of the tax exemption, and they're accused of playing partisan politics even though we now know they looked at groups from both sides and apparently even folks wanting to work on free software.
Make your mind up folks: either you want the IRS to do its job, even if that means taking a bit more time and extra scrutiny, or you want them to rubber-stamp whatever comes through.
Re:Open source equates to freedom. (Score:3, Insightful)
Re:Open source equates to freedom. (Score:4, Insightful)
That's what I've been telling people since the beginning. The IRS is/was in an impossible position. If it didn't investigate every group which applied for a tax exempt status, then people would whine about them not doing their job.
Baloney. People are not upset at the IRS for being picky. They are upset at them being partisan. Your claim that they "looked at groups from both sides" is more baloney. Sure they looked at a handful of progressive groups, but the tea party groups were subjected to far more scrutiny.
Re:Open source equates to freedom. (Score:3, Insightful)
I don't know what methods these rankings use, but calling the ultimately communist-controlled Hongkong freeer than America is a misuse of the word.
Re:Open Source is similar to the Tea Party ... (Score:5, Insightful)
"limited access to things that won't kill you (birth control, for example), and free access to things that will (i.e. guns)."
The birth control issue is about government forcing employers to pay for their employees' birth control. When there's a law that says employers must subsidize firearms purchases, I'll oppose that too.
Re: Social Security, one idiot with a sign doesn't speak for the whole movement and SS is only a "handout" when it's given to people who haven't paid into it their entire working lives.
"There's no such thing as "libertarianism". It's only a bunch of teenagers and retirees screaming "Gimme mine!"."
Funny. All the libertarians I know adopt the attitude "Leave me the hell alone". They don't want to be "given" anything. Just the right to keep the fruits of their own labor. No government bailouts, handouts, subsidies or special privileges for anyone.
Re:Open source equates to freedom. (Score:3, Insightful)
It does in many way sounds like it could be exploited as a tax dodge too. And the thing is, these would be companies free/open source people wouldn't have ever heard of, because they would be fake.
That seems like a conclusion jumped to with not a single example.
Check out the first line on this page: http://www.libreoffice.org/about-us/ [libreoffice.org]
Or this IRS letter proudly displayed on the Apache Foundation. http://www.apache.org/foundation/records/ASF-501c3.pdf [apache.org]
Or the statements on the Samba website: http://www.samba.org/samba/donations.html [samba.org]
These are hardly companies you have never heard of.
But each of them have probably taken a lot of money out of the pocket of other big players in the industry.
Players that have influence. Players that hold grudges. Players that can write letters and offer campaign donations.
This isn't about catching fake companies, its a political payback for large corporations.
The thing about a non-profit is that it really doesn't reduce tax revenue much at all. The money has to go somewhere, to the employees as salary or perks that have to be reported on their tax forms. It all gets taxed in the end.
Re:Tax dodge (Score:3, Insightful)
10% is more than enough to run the government. However, it's not enough to run it as presently run. Which is a whole separate problem.
Re:Open source equates to freedom. (Score:4, Insightful)
Property rights is an important aspect of freedom. You cannot be free if a third party can confiscate the fruits of your labour. Economic freedom isn't about exploiting anyone, it's about the right to keep what is yours. Any country that confiscates wealth from it's citizens is not "free", especially if they use theats of force to do it.