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Government Open Source Software United States

The New 501(c)(3) and the Future of Open Source In the US 228

An anonymous reader writes: If you're involved in the free and open-source software movement — especially in the United States — you may want to read through this, as long as it may seem. It appears that the United States' Internal Revenue Service has strongly shifted its views of free and open-source software, and to the detriment of the movement, in my opinion. From the article: "The IRS reasons that since Yorba’s open source software may be used for any purpose, Yorba is not a charity. Consider all the for-profit and non-charitable ways the Apache server is used; I’d still argue Apache is a charitable organization. (What else could it be?) There’s a charitable organization here in San Francisco that plants trees throughout the city for the benefit of all. If one of their tree’s shade falls on a cafe table and cools the cafe’s patrons as they enjoy their espressos, does that mean the tree-planting organization is no longer a charity?"
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The New 501(c)(3) and the Future of Open Source In the US

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  • Missing the Logic (Score:2, Interesting)

    by Anonymous Coward on Tuesday July 01, 2014 @02:52PM (#47362529)

    I think everybody is missing the logic of the decision.

    This probably isn't concerned with whether an organization like Apache is doing charitable work. All things being equal, the IRS would undoubtedly accept that.

    But all things aren't equal, because you have an army of lawyers and MBAs who spend all day thinking about tax avoidance strategies, in an epic arms race with the IRS.

    I suspect the root of the issue is companies taking deductions on contributions to open source projects, when the projects are really simply serving and benefiting the companies "donating" the money.

    So, for example, take Android. It's possible that Google is (or could be, if they were savvy enough) taking huge deductions on Android by funding the project through an "open source" shell organization.

  • Re:Executive Branch (Score:3, Interesting)

    by funwithBSD ( 245349 ) on Tuesday July 01, 2014 @03:52PM (#47363085)

    Yes, it is called Spoliation of Evidence.

    The legal concept that if you cannot provide (or destroy) evidence that is know to exist, then that failure is proof you have something to hide.

    Since the emails were known to exist, were promised to Congress, and then later "lost" is proof that there were emails that proved the IRS was being used for political purposes.

    Add to that the unusual number and timing of visits to the White House by IRS officials tied to those emails, there is sufficient evidence to show the linkage.

  • by rjstanford ( 69735 ) on Tuesday July 01, 2014 @05:02PM (#47363649) Homepage Journal

    I recommend reading the excellent IRS writeup posted at [] by the way.

    One of the key phrases:

    Developing Open Source Software Is An Activity Ordinarily Carried On As An Incident To Commercial Or Industrial Operations

    In a nutshell, Yorba failed to properly differentiate themselves from a traditional for-profit company. As a for-profit software company owner, I'd say that that's a fair statement. If Yorba was actively engaging in outreach to provide free software to schools (and then incidentally released it to the public), again that would be different.

    When you apply for 501(c)3 status you're asking that the general public subsidize your business. Its not unreasonable to require a significant burden of proof before such a federal subsidy is granted.

"There is no distinctly American criminal class except Congress." -- Mark Twain