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.
Re:Open source equates to freedom. (Score:5, Funny)
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Open Source makes it harder(not impossible) to do this: http://en.wikipedia.org/wiki/NSAKEY [wikipedia.org]
Re:Open source equates to freedom. (Score:5, Interesting)
Sure, but the government doesn't need to put in flaws, they can just keep them secret.
Several years back there was a bit of mystery around the Map the Internet project. They would basically ping every IPv4 address to see what responded. Some admins, being either crazy or stupid, would treat this as a malicious attack and attempt to do something about this evil attacker who pinged their box, so early on the learned to harden their box as much as possible. The made hacking the mapping box a goal in itself, and so eventually they were running SecureBSD stripped to just Ping and SSH, which kept them up and pinging.
However, at one point the hardened box did go down, with no logs or evidence on the box what happened. The router logs showed traffic from a WindowsNT box in the office, but the box happened to be powered off at the time. The project just rebooted and moved on, but the mystery lasted.
In hindsight it's no mystery - SSL has had a couple of critical security fixes since, and the router in question turned out to have a Cisco backdoor (or something equally silly, it's been a while) and other weaknesses long since fixed. But it was years before these weaknesses were discovered - the oddest part really was that someone was willing to show off by using them, but at the time bringing that mapping box down was quite the trophy.
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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 hard
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:4, Funny)
Why would the freest country in the world (except, perhaps, Iceland) be against it?
Damn.. and I just ran out of mod points.
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.
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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, 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.
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How about 'land of more-free-than-most, but-not-as-free-as-some?'
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.
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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 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.
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Just curious... which one do you consider "pinkier"? Canada? Just in case Switzerland != Sweden.
Of {US, Canada, Denmark}, and of the top 10 countries in both lists, the impression I have is that Denmark is the "pinkest". Maybe I'm just assuming "Nordic = most social-democratic", but that's the impression I have. (And I'd rate Sweden as pinker than Switzerland - yes, I'm quite aware that they're different countries.)
Canada's overall probably to the left of the US (socialized health insurance and stronger unions, for example), but to the right of most if not all of Western Europe, as far as I know.
Re:Open source equates to freedom. (Score:4, Interesting)
Why would the freest country in the world (except, perhaps, Iceland) be against it?
According to the 2013 Index of Economic Freedom [heritage.org], produced by the Heritage Foundation in partnership with the Wall Street Journal, the United States and Iceland are, respectively, the 10th and 23rd freest countries.
The top 10 positions are:
In addition to current rankings the index also reports trends. For example, economic freedom in the United States has declined since 2009, according to the graph on this page [heritage.org]. In comparison, freedom in Chile is high and continues to climb [heritage.org], which makes it a popular destination for American expatriates such as "Simon Black" over at his Sovereign Man [sovereignman.com] website.
Re:Open source cuts their revenue model (Score:5, Interesting)
They collect Income, Property, etc tax on the value of goods Sold. For every Open Office installation, there is a direct loss of a potential cut of the Income Tax from Redmond Washington. Many states also have Sales Tax revenue reductions.
Open Source Software is a direct threat to their revenue model.
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?
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What's funny about this is that my first job as a college intern was for a non-profit software and database services company. Even something that looks from all outward appearances to be a for-profit entity can be a non-profit and there's nothing unusual about that.
Some business areas are dominated by non-profits.
You would hope that the IRS would have some pretty precise rules and actually have them written down somewhere.
RTFM.
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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.
When looking for tax dodges you will occasionally investigate legitimate enterprises, but the illegitimate ones, that just are tax dodges, no one else will have ever heard of because they're paper entities for tax purposes. Imagine if MS or Toyota or the like tried to get a similar tax exempt status for all of t
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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 hav
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: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.
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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.
Baloney on your baloney. Just because a) progressive groups had more affairs in order, having existed since at least the 2008 time frame and b) progressive groups complied with the requests for documentation and c) progressives dont have an axe to grind about the IRS, does NOT mean progressive groups were given a free pass. Your confirmation bias speaks volumes.
Tea party supporters are anti-tax, for fucks sake it's in the name of their organization. How anyone could look at them and think they don't dese
Re:Open source equates to freedom. (Score:5, Interesting)
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Here's the problem, both (D) and (R) are for "big government", meaning they want a strong central government. BOTH parties love certain aspects of "big government". The left, likes the whole taxing people into oblivion and giving money to those people who can't or won't earn it for themselves. Stallman, is for "big government" as much as anyone else, just his version of big government.
One cannot complain about "big government" intrusions into people's lives, if you are voting for "big government" to take ca
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.
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I wasn't aware open source was inherently against Mexican immigrants or black presidents.
Re: Open Source is similar to the Tea Party ... (Score:2, Insightful)
treating someone as equals does not mean you hate them.
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I'm sure we can find a nut or two at an Open Source Rally with a controversial sign then put them on the front page.
If the OSS folks are really unlucky... the Lyndon LaRouche fans will show up to their rally with a booth and make them look back by proximity.
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.
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Tea Party is against illegal immigration, not legal immigrants. People who make it about race, do so because it is politically expedient way of marginalizing the distinction between "legal" and "illegal". If you want open boarders, let the people vote on that as a proposal, don't hide it inside mislabled "immigration reform" legislation which does nothing to actually fix the problem, and gives big handouts to cronies of Harry Reid and Bernie Sanders.
Some of us remember the broken promises from '86
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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.
The Democratic party did not found the KKK. A former Confederate Cavalry General did - Nathan Bedford Forrest. Look it up. There WERE indeed a group of SOUTHERN Democrats who were against the Civil Rights movement, but between Nixon and Reagan and the 'Dixiecrat' strategy, they are all gone and turned Republican. The Republican party in 1860 was the LIBERAL party. The Dems and Reps switched ideologies not to long after the turn of the 20th century (minus the Dixiecrats). You seriously need to go lear
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How the hell did this get modded 5, Insightful? At least the "leftists" understand history and know that the GOP is now the party of racists specifically because of the Southern Strategy that caused Democrats and Republicans to switch party affiliations: http://en.wikipedia.org/wiki/Southern_strategy [wikipedia.org]
Do you mean the Southern Strategy run by Nixon who was a card carrying member of the NAACP that Kennedy actually used as an attacking point in the south? The the racists south was then won by Carter, Clinton, and Obama. Strange how the South's racism alters the vote only when it elects republicans.
Whats funny about your mind numbingly ignorant claim that the parties switched affiliations is there are very few examples of people switching parties. Al Gore Sr. life long democrat who opposed Integration, or J
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Because Social Security wasn't money I earned, taken against my will from my paycheck, to be given back to me later.
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Wait? The Tea Party is for free access to guns? Where do I sign up?
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.
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I refuse to allow you to define the Tea Party in your own words!
> The "Tea Party" is for:
> government control of public morality
No it isn't. It is against the forcing of your morality upon me. That is freedom.
> limited access to things that won't kill you (birth control, for example)
No it isn't. It is against you enforcing your morality on me. My child cannot even have a tylenol at school yet can march right down to a supermarket and buy abortion in a bottle. Until that child is 18 that child
Open source != non-profit (Score:3)
Which is exactly why the U.S. government is against it.
There's no evil conspiracy, never was...please, stop the crazy talk...
Open source projects often have a complicated business model, and some open source projects are for-profit.
It makes a lot of sense to check business with complicated business models. Especially, if some of them claim tax exception as non-profit.
In any event, if there are issues it's better that they are discovered and remedied now, than 5 years later.
I'm sure it's fine for some projects to claim to be non-profit organizations, bu
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...
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Tinfoil hat? Check.
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:5, Funny)
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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?
Comment removed (Score:5, Informative)
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They can. But it doesn't change the fact that the IRS does as well, especially those they target.
Personally, I support the FairTax proposal, which has mechanisms to alleviate the impact it would have on those of lesser means.
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What I'd prefer seeing instead of a Sales Tax (consumption based) is a flat tax of ten percent with no deductions/allowances (everyone pays the same amount) but that aint ever going to happen because it would impact congress and the rich.
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What I'd prefer seeing instead of a Sales Tax (consumption based) is a flat tax of ten percent with no deductions/allowances (everyone pays the same amount)
Ten percent on what? Income or profit?
If you say "profit", what do I get to deduct from my income to call "profit"? Wages? Rent? Equipment? Raw materials? Transportation costs? Marketing and advertising? Employee training? Sales retreats? Investment expenses?
If it is income, I buy 100 shares at $10, and sell that 100 shares for $11, when I sell the shares I have an income of $1100, but a profit of $100 (actually less once you figure in brokerage commission). Are you going to let me deduct the cost o
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10% isn't enough to run the government.
A flat tax of 25% is the minimum, and that is assuming the maximum reasonable +/-5% or so shrinkage of government spending.
I would like to see a flat personal income tax of +/-55% with no exceptions, a 0% corporate income tax, and a government payout = the poverty level income for every household in America + single payer healthcare with no means testing at all. That would actually balance the budget and you could eliminate a lot of bureaucracy when you don't have to m
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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.
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Which is why you send out some sort of regular rebate to lower income earners to make up for the more regressive aspects of a consumption tax.
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There are bad taxes and worse taxes. The inflation tax is the worst. Income tax sucks. The least bad are consumption taxes.
The simple way to avoid this negative effect on the poor is to send every single person in the USA their tax "prebate" at the beginning of the year.
$prebate = $tax_rate * $income_threshold
That way, anybody with income below a certain threshold (poverty level or some multiple thereof?) would be unaffected by the tax. If they were below the poverty level, it would even be a windfall.
Re:Tax dodge (Score:4, Interesting)
Well, primarily because Congress can't find its ass with both hands. :-) But also because income tax was set up by the 16th Amendment [wikipedia.org] to the Constitution, and major change would require an additional constitutional amendment. Well, in my opinion anyway. (recent precedent has been to just ignore the Constitution when it gets in the way.)
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Depends on how the system is implemented, and in the case of the FairTax... the IRS can go away as collecting is moved to the states, to quote them [fairtax.org]:
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That's interesting. Most of this kerfluffle is about 501(c)4, used for civic organizations. They were singling out groups whose names implied that they were political, rather than civic, and should file under section 527 instead.
The tax implications are the same: you can't deduct donations to either one. Both are tax exempt, which means that their profits aren't taxed, but they can't be paid out to investors. They have to be used for the organization's stated purpose.
The key difference between the two is th
Re:Liberty (Score:5, Insightful)
I'll let you in on a little secret:
Libertarians are not pro-liberty.
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That's at the beginning of the sentence. Are you using big-L Libertarian, as in the party, or small-L libertarian, as in the political philosophy? There is such a large difference between the two that I'm not sure we're talking about the same thing. I used a small-L quite on purpose.
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.
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I'll let you in on a little secret
Wow, that's great. Thanks so much. I'll let you in on another little secret: Not everyone in a group is the same, nor does everyone have the same agenda. That's called Presumption of Unitary Action by an Organization.
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...
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 char
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.
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the question is whether the orgs were targeted BECAUSE the setup was for OS software or if they thought it was being used to stash profits.
did they just keyword search for Open Source or did they see a number of companies gathering together??
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scrutiny is normal (Score:5, Funny)
Review and investigation of applications is to be expected in any organization.
Only the FISA court approves applications without review
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but agenda driven discriminatory review is forbidden. each application is to be judged separately on its own merit. There is to be no political or ideological triage.
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."
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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?
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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.
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That's tricky. As the OP says, for lots of applications it's quite possible the only people who could use the software are the for-profit company benefiting from the tax treatment. To figure out whether these maneuvers are legal you'd need somebody who was both a tax geek AND a computer geek.
If you read the article the Open Source apps don't get automatically denied, or sent to some heightened scrutiny status, they get sent to management. Presumably management sends it to their geek-squad. After all, if the
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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.
'Cause, I mean, it's not like an IRS audit is anything to worry about when you've done nothing wrong.
You might want to ask Richard Nixon about his 'Enemies List' and how he tried to use the IRS to harass them.
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That would be the if they present a legitimate reason part of the sentence that you quoted yet failed to read.
No, I read it.
Why do you think an audit is any less troublesome if they present a legitimate reason and you've still done nothing wrong?
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The point of an audit is to find out if you've done anything wrong. An audit is an investigation. If they only investigated everyone they knew with 100% certainty were guilty numerous people would be able to dodge their taxes easily. For example let's say an accountant does 60 tax returns and 57 have the exact income necessary to get maximum Earned Income Credit. Maybe another accountant turns in 43 of tax returns and all have more then half their housing expenses deducted as a Home Office. In both cases th
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it's also entirely possible to operate in pure for profit fashion while doing open source consulting etc while labeling it as a nonprofit.
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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.
Hold on sparky. Since we are talking about open source software, the software released is presumably open source and thus a donation to the world. Since this is an actual donation what's so wrong with counting it as a donation for tax purposes?
I think companies should get a tax break on the salaries of their employees who develop open source software that is made public even if that software is also used commercially.
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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?
Yes. Yes, we are.
At the risk of disgust for not defending the hivemind, we Slashdotters are a bunch of mindless fools being pushed from one outrage to another. Under the banners of "freedom" and "technology", we're taught to hate the masses, the government, big business, small business, the wealthy, the poor, the crazy and the calm, all because everybody everywhere has done something worth lambasting on the front page.
Every invention is panned as a new patent on old technology, rather than an improvement on
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Appalling! I wonder how anyone could possibly hate the IRS and the government. After all they've done for us.
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.".
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With open source you'd need to hike it up to a higher level.
If Tim Cook's lawyers figure out a way to declare Apple's entire development budget a charitable contribution it's their entire job to make that happen. OTOH Apple has historically contributed to some completely legitimate open source projects. As a tax geek I have no fucking clue how to tell the difference between Tim Cook's lawyers screwing the Feds and Tim Cook donating developer time to legitimate open source projects.
OTOH my manager probably h
Right in TFA (Score:3)
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.
It appears that the fear here is that for-profit companies have the potential to evade taxes by relabeling their code as "OpenSource", and turning their development staff into 501C employees (supported by donations from the for-profit company). For that reason, they want someone with a wee bit more training than your average low-level screener looking at applications.
IMHO allowing this would be a Good Thing from the standpoint of social policy, as the resulting software could be used by anyone, rather than just that one company. But deciding on what is good social policy to allow is Congress' job, not the IRS's.
No (Score:2)
Some companies where trying to use open source to mean they didn't need to pay taxes.
IRS Uses Open Source Products (Score:2)
Motives (Score:2)
Are you assuming that any of this has to do with finding actual tax criminals? The IRS, just like any US government agency, works for the lobbyists. If they were looking at open software companies, then follow the money trail back to any of the big software companies. Microsoft and Oracle, BFFs all of a sudden, come to mind. Just like NSA snooping has more to do with finding and shutting down movie pirates than terrorists. Just follow the money. It worked for Watergate.
A Taxable "Event" (Score:2)
This is part of the currents government lust (Score:2)
lust? yes, lust for power.
Let's be real, we've had the NSA spying on us for who knows how long, and suddenly, by accident, the IRS is picking on some political groups, medical marijuana (after all, it's a stab in the "war on drugs" policy) and god knows who else? This isn't by accident, this is part of the Governments plot to keep all people down.
Our Government (that is, if you are American) is corrupt. It's using it's power in different offices to harass it's citizens. It's using it's power to harass
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You can start by calling it "THE Government" instead of "Our government". "Our" implies ownership or mutual participation. As you pointed out, the NSA, IRS and the rest of the criminals are operating a cartel designed to extort wealth from and exert control over The People.
It's "The People" on one side and "The government" on the other side. There is no "our". You're either one of them(a government parasite) or one of us (the American people).
Is everyone here under the age of 21? (Score:2)
Free as in freedom, not free as in beer.
perfectly legitimate to make money off open sourced code, the IRS simply says they want to make sure you're paying your taxes on that profit.
is it a slow tuesday? let's actually put some thought into topics please.
Makes sense (Score:2)
It makes sense, that the IRS takes a close look at open source software organisations claiming exempt status.
Software is usually a very commercial thing and a big business. So if someone makes software for free, the idea isn't far behind for some evil people to use this to optimise taxes: Create an Open Source foundation to build some very limited distribution open source and reaping all benefits of the tax exemption, then sell the software. This kind of scam looks pretty obvious.
So it's only natural, that
Closed source companies gave money to Obama (Score:2)
So is it really any surprise that open source groups would get "extra scrutiny" from the IRS?
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some of the biggest companies in the world use Open Source.
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You've got it backwards.
Read the article. Open Source apps get elevated to a manager. Presumably this is because having a deep understanding o tax law gives you no insight into which applications are legitimate open source projects, and which ones are Tim Cook's tax lawyers outsmarting the Feds.
Given that open source groups on Slashdot do not complain that the IRS denies their applications, or subjects them to tyrannical oversight before granting their applications; I strongly suspect the managers send thes
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More precisely, it's the owners of large corporations that give large quantities of money to political campaigns.
Because as much as Mitt Romney wants to deny it, corporations are not people - they are owned by people, they are run by people, they employ people, but they are very different from people in very important ways. For example, there is absolutely no way to send a corporation to jail. Also, a lot of the people connected to the corporation have absolutely no say in what the corporation actually does
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This must be hard for you.
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.