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IRS Looking at Google/Mozilla Relationship

CmdrTaco posted more than 5 years ago | from the can't-imagine-why dept.

Mozilla 261

ric482 writes "With the release of the Mozilla Foundation's 2007 financial report, questions have been raised by the IRS, who are due to perform an audit on the non-profit organization behind the massively popular Firefox browser. Last year, the Foundation received $66 million of its total $75 million revenue (88 percent) from search engine maestros Google, so the IRS are looking for blood over the organization's tax exempt status. Back in 2006, Mozilla got $59.5 million from Google — around 85 percent of the organization's revenue. Google and Mozilla are part of a 'you scratch my back, I'll pay your bills' sort of agreement, with the Google search bar firmly placed in the toolbar, and on the default homepage. Things were a bit rocky a couple of months back when Google unveiled the Beta-run of its Chrome browser, but Mozilla and Google hugged it out and sealed a deal that will last for another three years. That deal will expire in November 2011."

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261 comments

Blame Microsoft (4, Funny)

plover (150551) | more than 5 years ago | (#25831389)

Why not blame Microsoft? Maybe they filed a complaint with the IRS.

Unleash the conspiracy theories!

Re:Blame Microsoft (1)

JasterBobaMereel (1102861) | more than 5 years ago | (#25831769)

This would be the Microsoft who have a Browser that has an MS search bar embedded ... but that's OK because it's the same company?

Perhaps they should look at the Bill and Melinda Gates foundation, it gets all it's money from one source ....?

Re:Blame Microsoft (4, Insightful)

pipatron (966506) | more than 5 years ago | (#25831871)

but that's OK because it's the same company?

Exactly. The issue here is that Mozilla Foundation is a non-profit organization, but Google clearly is not. Presumably IRS could be interested in exactly how close ties they have.

Where's the smoke? (4, Insightful)

Dare nMc (468959) | more than 5 years ago | (#25832275)

Since Google is a profitable entity isn't this tax neutral to google? IE if Google and mozilla merged, and Google spent the same amount on development, and giving as mozilla does, google would have the same profit, and thus pay the same taxes. The only difference would be some of the last 15% (non google contributions.) Since individuals can write off gifts to Mozilla foundation, but not to google then that's the money the IRS is chasing, not googles portion of the pie.

Re:Where's the smoke? (2, Insightful)

plover (150551) | more than 5 years ago | (#25832533)

Perhaps Larry and Sergey are trying to write off donations to the Mozilla Foundation, and the IRS is examining if that's a bit too close to home.

Re:Blame Microsoft (4, Interesting)

Richard_at_work (517087) | more than 5 years ago | (#25831903)

I seem to remember that after a new IE7 install, I get asked if I want to switch search engine providers (among a whole load of preferences on first use) - but I don't get asked the same after a new FireFox install...

Re:Blame Microsoft (-1, Troll)

Anonymous Coward | more than 5 years ago | (#25831993)

Why is it that Firefox has been out since my early college days, well back then it was Phoenix, but yet, people still insist on calling it FireFox when their favourite browser says Firefox on top.

Even in their old FAQ mentioned the proper spelling if Firefox. Why the Fox? What the fuck? Err i mean WTF!

Re:Blame Microsoft (0)

Anonymous Coward | more than 5 years ago | (#25832175)

I call it fIReBirD! I don't even know what that means!

Re:Blame Microsoft (5, Funny)

Anonymous Coward | more than 5 years ago | (#25832229)

> Why is it that Firefox has been out since my
> early college days

Because you're very young.

Re:Blame Microsoft (3, Insightful)

div_2n (525075) | more than 5 years ago | (#25832359)

Microsoft is a for-profit business with it's own search engine division and provides a product that could drive revenue to that business.

The Mozilla Foundation is a non-profit organization that provides financial support to the open source Mozilla project that has a product that drives revenue to Google in a deal inked where they have exclusive rights to being the default during installation in return for donating to the Mozilla Foundation.

I just don't see how the striking difference between those two scenarios could be more plain. I'll boil it down for those that can't:

Internet Explorer/Microsoft is a self-interest driven scenario.

Firefox/Mozilla/Google is a mutually beneficial scenario where one party is a business and the other is a non-profit.

As to how this answers your question--remember that Microsoft was convicted of being a Monopoly in the past. Neither Google nor The Mozilla Foundation suffers that burden.

Re:Blame Microsoft (2, Insightful)

The_Wilschon (782534) | more than 5 years ago | (#25832435)

On the other hand, if you look at the search box, you will see that there is a down arrow just to the right of the google logo at the left end of the box. If you click on this arrow, you will find a default list of search engines. If you select one of these, then it will subsequently become your default search engine. You can also add searches to this list at any time. Heck, you can remove the google search from the list entirely if you want. Frankly, when changing search engines is that easy and obvious, I really don't want the browser nagging me on first install. Why not nag me on first install about all the other browser settings, most of which are much less obvious to change?

Re:Blame Microsoft (0)

Anonymous Coward | more than 5 years ago | (#25832501)

Firefox doesn't come pre-installed on every single PC, unlike IE on windows. MS were in legal shit over tying IE to MSN, they merely did what they needed to do to avoid further litigation.

Re:Blame Microsoft (0)

Anonymous Coward | more than 5 years ago | (#25831947)

Why not blame Microsoft? Maybe they filed a complaint with the IRS.

Unleash the conspiracy theories!

What for? This is slashdot. It is obvious for everyone here that Microsoft is the real mastermind behind this. Why write it?

Laundering (3, Funny)

Swizec (978239) | more than 5 years ago | (#25831391)

It's true then! Google is really an evil Mafia-type organizations hence the quick rise to popularity and Mozilla is their money laundering machine!

The gig is up guys!

Re:Laundering (1)

mcgrew (92797) | more than 5 years ago | (#25831851)

I smell fish.

Does the IRS investigate other tax-exempt nonprofits that get large contributions from corporate donors? WHY are they investigating Mozilla?

I guess I have to RTFM.

Re:Laundering (0)

neoform (551705) | more than 5 years ago | (#25832457)

I thought something was up when I went into the mozilla store and asked the chef for some pancakes and he looked at me with a perplexed look and said "you.. actually want to eat here??"

Google search bar? (5, Interesting)

drapeau06 (1010311) | more than 5 years ago | (#25831411)

My version of Firefox just has a regular "search bar" that defaults to Google.
If I want another search, e.g., AbeBooks.com, I just change it to that. Does it become an "AbeBooks.com search bar" then?

Re:Google search bar? (1)

hansamurai (907719) | more than 5 years ago | (#25831693)

Yes, because you'd be searching AbeBooks when you typed in it and pressed enter.

Re:Google search bar? (1)

theaveng (1243528) | more than 5 years ago | (#25831797)

He was talking about the default setting. Mine was originally Google, but now Firefox defaults to Verizon. Apparently his defaults to Abebook's search.

Re:Google search bar? (1)

mfh (56) | more than 5 years ago | (#25832491)

If I want another search, e.g., AbeBooks.com, I just change it to that. Does it become an "AbeBooks.com search bar" then?

Point taken, but also noted is that over 88% of users will never change default settings. Plus even if users change default settings, this is free advertising for the Google brand which increases brand awareness. Google did lots of this stuff to get where it is today, taking a page from Microsoft's default settings use of proprietary advertising and packaged solutions (ie: AOL and others each pay a portion of the Windows development and deployment costs, and they receive packages included in Windows plus other perks and Windows customer information, making the money that Windows costs gravy for MSFT).

Link? (5, Insightful)

VisualD (1144679) | more than 5 years ago | (#25831431)

Would it kill you to put a link in there somewhere?
http://www.mozilla.org/foundation/documents/mf-2007-audited-financial-statement.pdf [mozilla.org]

Re:Link? (1, Informative)

Anonymous Coward | more than 5 years ago | (#25831651)

The Firehose story has the link:
http://www.linuxsolutions.fr/mozilla-has-irs-breathing-down-its-google-branded-neck/

nothing wrong with corp. support for OpenSource (4, Insightful)

AlphaZeta (1356887) | more than 5 years ago | (#25831445)

To me, there shouldn't be much a fuss about big corporates supporting open source. In fact, I think there should be more involvement (financially) for those big companies who no doubt have benefited from the open source community. As long as the licensing remains open source, everything is transparent...

Re:nothing wrong with corp. support for OpenSource (3, Insightful)

TheRaven64 (641858) | more than 5 years ago | (#25831569)

This money isn't exactly supporting open source. It goes to the Mozilla Foundation, which employs a few developers, but most of the money remains unspent and a big chunk goes on advertising and paying board members.

Re:nothing wrong with corp. support for OpenSource (3, Informative)

VisualD (1144679) | more than 5 years ago | (#25831773)

Not quite unspent, they have $68,847,453 invested in various areas (common stock, bonds etc...).
Marketing is not that big of a chunk (relatively speaking) at $6,332,459 (compared to $20,000,000 on development).

Re:nothing wrong with corp. support for OpenSource (3, Insightful)

TheRaven64 (641858) | more than 5 years ago | (#25832133)

So, 72% invested, 6.7% in marketing, and 21% on development? Or, to put it another way, a third as much spent on marketing as on development? I can't think of many companies (big pharmaceuticals excepted) that have this high a ratio of marketing to product development spending.

It's probably not a bad idea that they're spending less than a third of their income, since it means that they can keep up this rate of expenditure during several years of economic down-turn irrespective of what their income does, but it does mean that, at the moment, only 21Â of every dollar that Google is paying to the foundation actually goes to improving the browser. With this in mind, developing their own browser probably made a lot of commercial sense.

Re:nothing wrong with corp. support for OpenSource (0, Troll)

MrNaz (730548) | more than 5 years ago | (#25831827)

Mozilla is no longer a friend to the open source community, and the sooner we realize that, the sooner these profiteering parasites will stop making megabucks riding on the back of their excellent developers, and those excellent developers can contribute to a project that actually makes a difference in the open source world. Mozilla (the organization) is no longer a benefit to the community, and has become dead weight.

Firefox should be forked. Better yet, it should be replaced with a browser that lives up to the lean and fast goal that Firefox initially had, but has since lost on its way to becoming the bloated mess that it is today.

There are many candidates out there that could be polished into a fully featured high performance browser. Being an Xfce user, my personal favorite is Epiphany [gnome.org].

Re:nothing wrong with corp. support for OpenSource (2, Interesting)

Massacrifice (249974) | more than 5 years ago | (#25832023)

Isn't Epiphany using Gecko, Mozilla's HTML rendering engine?

It may be true that Firefox has kind of lost its way over the years, but you cannot deny it's popular success. And the mere fact that you mention that we should fork it, is testament to their open-sourceness, which is all it was all about in the beginning : have a browser that's better than IE, and that we can claim ours. In that respect, I think Mozilla is a resounding touchdown for the open source movement, and although technically inferior to to Webkit (Chrome, Safari), it still is the less corporate-agenda-encumbered of all browsers.

Re:nothing wrong with corp. support for OpenSource (1)

compro01 (777531) | more than 5 years ago | (#25832121)

Epiphany does use gecko, but there is also an experimental version that uses webkit.

Re:nothing wrong with corp. support for OpenSource (0, Troll)

MrNaz (730548) | more than 5 years ago | (#25832165)

Isn't Epiphany using Gecko, Mozilla's HTML rendering engine?

Yes, but Gecko is "Mozilla's" in the same way that the Linux kernel is "Red Hat's". They contribute to it, but not a whole lot, they concentrate on building the browser. I.e., the bits that bring in their dollars.

It may be true that Firefox has kind of lost its way over the years, but you cannot deny it's popular success.

People use Firefox because mindshare has slightly expanded allowing for a second option. Very few FF users use it because they think it is the best browser, they use it because they think it's the only alternative.

it still is the less corporate-agenda-encumbered of all browsers.

Disagree. Epiphany, Konqueror, Shiira [shiira.jp] just to name a few, and let's not forget IceWeasel. These are all far less beholden to corporate interests and far more representative of the interests of the open source community.

Re:nothing wrong with corp. support for OpenSource (1)

pseudonomous (1389971) | more than 5 years ago | (#25832427)

What strikes me as funny here is the "Being an Xfce user, my personal favorite is Epiphany." What does that have to do with anything? Opera is nice but it's proprietary, konqueror runs snappy and has a good interface, but seems slow on loading pages, epiphany is usable but ... well, I have this notion it's buggy but this might becuase I'm used to using it on a Debian install that probably hasn't been updated in 2 years. My personal favorite, actually, is probably links II. The only problem is that it can't handle java or flash, so I still need to have firefox or opera around. Also, Debain and the GNU project sort-of forked firefox already: http://en.wikipedia.org/wiki/Iceweasel [wikipedia.org] http://en.wikipedia.org/wiki/GNU_IceCat [wikipedia.org] I think Ubuntu is thinking about forking the project to, although, up to now, they've had some special arrangement that let them package firefox with out rebranding.

What makes Mozilla different? (1)

iammani (1392285) | more than 5 years ago | (#25831461)

What makes Mozilla different than say a non-listed private company?

Re:What makes Mozilla different? (1)

Nerdfest (867930) | more than 5 years ago | (#25831499)

If they're a non-profit entity, there are a different set of rules that must be obeyed.

Re:What makes Mozilla different? (5, Informative)

morgan_greywolf (835522) | more than 5 years ago | (#25831645)

Actually, having done bookkeeping for a 501(c)3 on a voluntary basis, I can say that there really aren't that many differences. Basically, a 501(c)3 is required to followed GAP accounting methods -- just as any other IRS-recognized corporation. They have to donate a certain minimum percentage of their annual income to charity. And they have to show that they are organized for the purposes which a 501(c)3 may be organized. Since a 501(c)3 is basically a 'miscellaneous charity status' with the IRS, this means pretty much anything that benefits the community or the greater good, except politics -- they can't directly or indirectly support a particular candidate or ballot initiative. (How non-profits often get around this is by saying "We don't endorse a particular candidate, but many of our members say they are voting for X." )

The important thing that IRS will be looking for is this: Is Mozilla money co-mingling with Google money? Are they keeping it separate? DOes it look like Mozilla is just a front for Google? And so forth. They'll do that by auditing the books, piling through receipts and conducting interviews with appropriate personnel. Mozilla as a non-profit can, believe it or not, sell almost anything. Selling things is not at all illegal for non-profit and actually 'making a profit' is not illegal -- the profit just has to go into a specific fund set aside for purposes that Mozilla is organized for. Such as, in this case, funding Firefox and Thunderbird development.

Re:What makes Mozilla different? (2, Insightful)

MrNaz (730548) | more than 5 years ago | (#25831877)

Such as, in this case, funding Firefox and Thunderbird development.

If that were the case, the amount of money they are earning should fund a hell of a lot more development than is actually going on.

$50m+ per year should fund enough developers to work on a fully integrated suite of internet tools, but they seem to be barely coping with maintaining Firefox and Thunderbird.

Their primary interest seems to be ensuring that their Intellectual Property does not get included in distros like Debian. Open source non-profit my ass.

Stop the Debian Bullshit (5, Insightful)

CritterNYC (190163) | more than 5 years ago | (#25832283)

Honestly, stop with the Debian bullshit already. Mozilla doesn't want others altering their software and still keeping their trademarks intact (which is what Debian wants to do). Debian places the *EXACT* same restrictions on their own trademarks.

More than one kind of 501(c) nonprofit (3, Informative)

snowwrestler (896305) | more than 5 years ago | (#25832477)

501(c)3 is the most well-known because that is how charities organize themselves. But there are other kinds of nonprofits; for instance many of chambers of commerce are organized under 501(c)6, which allows more political activities.

Not related to the current discussion because Mozilla is a 501(c)3. Just making the point that "nonprofit" does not always mean 501(c)3.

Re:What makes Mozilla different? (5, Interesting)

owlnation (858981) | more than 5 years ago | (#25831735)

If they're a non-profit entity, there are a different set of rules that must be obeyed.

Generally speaking -- and I'm not specifically accusing Mozilla -- non-profit status is rarely what it seems. Usually the motivation in setting this status up is to avoid certain rules or taxes. It's only proper that this is investigated in Mozilla's case, if most of their income does come from a large highly-successful company.

The IRS should also be taking a very, very close look at Wikipedia. For those reasons, and also the fact that there have been individuals in that organization that have shady financial histories.

Re:What makes Mozilla different? (0)

Anonymous Coward | more than 5 years ago | (#25831601)

What makes Mozilla different than say a non-listed private company?

They are a non-profit organization that is tax exempt. They have stricter rules when it comes to things like this.

Re:What makes Mozilla different? (1)

iammani (1392285) | more than 5 years ago | (#25831713)

They are a non-profit organization that is tax exempt.

All I understand that in non-profit org, there are no shareholders and hence no dividend.

Other than that, I see Mozilla is very similar to other orgs. They *pay* the members of the board (which can include what the members would receive if they had been entitled to dividends) and they also spend money on advertisement.

Is there a reason it should not be taxed as much as a private entity?

Re:What makes Mozilla different? (2, Informative)

Anonymous Coward | more than 5 years ago | (#25831919)

A non for-profit is a different tax entity to a regular for-profit company. Even though it's mostly charities that are non for-profits (and thus people think that all non for-profits are feel-good), there's absolutely no legal association or expectation that a non for-profit is a charitable organisation - a lot are set up exactly like Mozilla - all the money is given to directors or plowed back into R&D. If you were setting up a business, and you were only in it for the money, didn't care that your business has no place to go once it became profitable and didn't need large capital injections to expand (eg. your product sells for an extremely high per unit compared to it's production costs and is an overnight success), then a non-profit is the best decision.

Soooo (4, Insightful)

zifferent (656342) | more than 5 years ago | (#25831465)

They give away the browser and spend all of their revenue on development. So, how much taxable profit did the Mozilla foundation make anyway? The IRS has nothing to gain from this. I smell a rat closeby!

Re:Soooo (3, Insightful)

Andr T. (1006215) | more than 5 years ago | (#25831495)

There's a lot of money there. I think audits on those cases are common and I guess there's nothing to be afraid of.

Re:Soooo (2, Insightful)

Dun Malg (230075) | more than 5 years ago | (#25831511)

They're looking at the big chunk of cash Google gave them and trying to find a weasel way to say that it was Google paying them in exchange for "bundling" the search bar. It's semantic bullshit, but the IRS thinks they might be able to get money out of it, so they're going for it anyway. The IRS is worse that patent trolls.

Re:Soooo (5, Interesting)

jellomizer (103300) | more than 5 years ago | (#25831565)

Or... They are just doing their job and investigating possible suspicious activities. If Microsoft did the same thing you would be all up in arms on how Microsoft is trying get out of paying more taxes. But Google with Mozilla, that has to be different. Innocent until proven guilty, they are investigating it as it looks fishy but that is.

Re:Soooo (0, Troll)

BlueParrot (965239) | more than 5 years ago | (#25831615)

Microsoft DO do the same thing. Ever wondered why OEMs pay less for a windows license that does any other old customer? It's either a tax crime or a violation of antitrust law, and Microsoft gets away with it.

Re:Soooo (4, Insightful)

Jellybob (597204) | more than 5 years ago | (#25831653)

I've never really wondered that. The OEMs are buying Windows licenses in batches of several thousand, on a regular basis.

It's standard business practice to give discounts to customers who provide you with a large, regular, income.

Re:Soooo (0)

Anonymous Coward | more than 5 years ago | (#25831831)

If you have a monopoly as Microsoft has, their discounts should be the same for all their customers.

They should just give volume discounts and not play favorites, or as some suspect make anti-competitive demands.

The court should just have force microsoft to make public their volume discounts and force them to apply it to all OEMs that buy in sufficient bulk.

Re:Soooo (0)

Anonymous Coward | more than 5 years ago | (#25832633)

the anti-trust settlement requires all of that

Re:Soooo (1)

westlake (615356) | more than 5 years ago | (#25832661)

The OEMs are buying Windows licenses in batches of several thousand, on a regular basis.
.

More like tens of thousands, hundreds of thousands. Netbooks are perhaps 10% of the laptop market with 10 million sold this year.

Re:Soooo (1)

bdcrazy (817679) | more than 5 years ago | (#25832235)

The thing about OEM Windows licenses is that the OEM agrees to provide all support for that install. If you purchase an OEM machine, you can't call up Microsoft support. If you purchase a retail version, you can (though the difference is really minimal in most user cases and usually only involves a few calls).

Re:Soooo (0)

Anonymous Coward | more than 5 years ago | (#25832169)

You mean like SAP ?

Not innocent until proven guilty (1)

samjam (256347) | more than 5 years ago | (#25832545)

It's guilty when proven guilty, and MS have been found guilty enough times, in and out of court.

Convicted abuser of a monopoly position
Breaking windows for competitors products
Holding back on interopability docs
Special funding related to the SCO debacle
GPL is "viral"
Claims like "Linux breaches loads of our patents"

etc etc

Sam

Re:Soooo (0)

Anonymous Coward | more than 5 years ago | (#25831703)

Of course Google were paying them. That's not an issue. Non-profits are allowed to have income.

Re:Soooo (1)

elrous0 (869638) | more than 5 years ago | (#25831743)

Google was not only paying them, it was basically buying the company. Pointing out that 88% of Mozilla's entire revenue came from Google alone and that Mozilla repaid this by bundling Google into all the defaults and the toolbar is far from "semantic bullshit." Now personally, I don't think there is anything wrong with that. But, then again, I never thought there was anything wrong with MS bundling internet explorer with Windows either.

Re:Soooo (1)

TheRaven64 (641858) | more than 5 years ago | (#25831577)

They don't spend anything like all their money on development. Last year they spent about 10% of their income on development, some more on advertising and paying the board, and kept the rest in their war chest. They made a large profit, but didn't pay tax on it.

Why go after Mozilla? (4, Insightful)

Andr T. (1006215) | more than 5 years ago | (#25831467)

...and not after some other fictional 'non-profit' organizations [wikipedia.org]?

Re:Why go after Mozilla? (0)

Anonymous Coward | more than 5 years ago | (#25831711)

Or how about all of those non-profit, religious organizations that actively endorsed political candidates over the past year?

Yea, microsoft is guiltless on this one too (1, Insightful)

unity100 (970058) | more than 5 years ago | (#25831497)

back in the yahoo story a few days ago, i told that it smelled microsoft all over, and then modded to oblivion and yanked with replies defending microsoft, saying there was NO wrongdoing on microsoft's part, despite the investigation was started by DOJ, which is still populated with the neocon administration which has been WAY chummy with microsoft.

now, suddenly, IRS gets in the picture, and on the target there a major competitor and a major headache for microsoft. despite there are numerous open source software using same kind of deal with various corporations for funds, somehow, for some reason, its google+mozilla that irs feels the need to investigate.

of course, that again has no relation to microsoft, which is best pals with the neocon administration still in power. the thing is just a coincidence.

Re:Yea, microsoft is guiltless on this one too (0)

Anonymous Coward | more than 5 years ago | (#25831545)

Hey the government needs to get that $700,000,000 from somewhere!

Re:Yea, microsoft is guiltless on this one too (0)

Anonymous Coward | more than 5 years ago | (#25831633)

I think that should be $700,000,000,000.

Yeah, whatever (-1, Troll)

Anonymous Coward | more than 5 years ago | (#25831609)

Slashdot, land of idiocy and tin foil hats.

Lest us forget all the supposed rights advocates suddenly crying out that Palin's e-mail was fair target because something possibly wrong was found. Oh that's right, the "neocon" tossers have no other ability other than over react

Re:Yea, microsoft is guiltless on this one too (0)

Anonymous Coward | more than 5 years ago | (#25831611)

I got pulled over for a speeding ticket today and I have a Tux sticker on my bumper. Bill Gates it at it again, boys!

So if anyone who has any competition whatsoever with Microsoft gets the once over from the authorities that means Microsoft is secretly behind it? Get over yourself.

Re:Yea, microsoft is guiltless on this one too (1, Funny)

Anonymous Coward | more than 5 years ago | (#25831727)

Ever since I put a MS sticker on my bumper, I have yet to get pulled over. Also, tinfoil hats are quite fashionable. The trick is to find real tin foil.

Re:Yea, microsoft is guiltless on this one too (3, Insightful)

Splab (574204) | more than 5 years ago | (#25832137)

How on earth did you get modded insightful for that piece of fear mongering?

Mozilla knew this might be coming - they put money aside for this eventuality already in 2003. But nice try.

Re:Yea, microsoft is guiltless on this one too (1)

Draek (916851) | more than 5 years ago | (#25832181)

Well, if we're going by crazy conspiracy theories with no factual backing whatsoever, why not Apple instead of Microsoft? its CEO is part of the board of directors of Disney, one of the largest US businesses and the one behind most of the copyright legislation currently in place, is reported to have a $1 yearly salary with "special benefits", yet has the IRS or *any* government institution ever investigated them?

At least with Microsoft we got an antitrust suit, with Apple the judges basically said "they're too small to have done anything bad". Plus, who makes the prime competitor to Apple's Safari? and to their current cash-cow, the iPhone?

Well, yeah, "the IRS smelled money" is the simplest (and most likely) theory, but at least Apple makes more sense than Microsoft, IMHO ;)

Wow (3, Insightful)

elrous0 (869638) | more than 5 years ago | (#25831531)

85% of Mozilla's funding comes directly from Google?!? For all practical purposes, Google basically owns them. No wonder Mozilla was so forgiving of Chrome.

Re:Wow (2, Insightful)

Anonymous Coward | more than 5 years ago | (#25831751)

85% of Mozilla's funding comes directly from Google?!? For all practical purposes, Google basically owns them. No wonder Mozilla was so forgiving of Chrome.

Or it might be that Mozilla likes the idea of friendly, standards-compliant competition which steals away large chunks of the Internet Explorer market share based on the Google name. But I'm just an AC, what do I know...

Chrome VS. the IRS? (1)

olddotter (638430) | more than 5 years ago | (#25831957)

The advent of Chrome makes it hard to make the case that Mozilla and Goggle are too closely tied, or the same entity. I suspect someone is just curious about a non-profit that is generating profits.

I tried reading the report, but still couldn't quiet tell what Mozilla's expenses are.

Here we go again (1, Funny)

Trollmastah (129873) | more than 5 years ago | (#25831571)

seek topost (thatflamebait);
Firstpost (the thread, fast);

while ($natalie) {
petrifies $to($stone);
not grits;
}

accept the, moderation;
seek the, $-1Troll, $-1offtopic'
and wait;
stat thekarma;

unlink and listen (for, $theflames);

for (a, karmawhore our /.) {
system ("is trollheaven");
--

Using the money (2, Insightful)

Thanshin (1188877) | more than 5 years ago | (#25831573)

Shouldn't the IRS be more concerned about how is mozilla spending that money than where it comes from?

If a "save the children" non-profit organization changed their name to "Google saves the children" and Google donated $100 million, they should lose the tax exemption?

"Non-profit" isn't about how much money enters the organization but how much of it is used in pushing the agenda forward. If they're spending the millions of dollars to make a better free browser, they should still be tax exempt.

If they suddenly started using that money to buy sport cars for every programmer, they should pay taxes even if Google gave them just two dollars.

That's weird (3, Interesting)

mosb1000 (710161) | more than 5 years ago | (#25831587)

What do they plan to tax? Their revenues? Is it just that whenever there's money anywhere the IRS thinks uncle sam should get a share of it? Are they claiming that Firefox is some kind of tax shelter? I don't think that's the case. . .

How come there is no story associated with this summary?

Re:That's weird (2, Informative)

east coast (590680) | more than 5 years ago | (#25831801)

Actually, they're probably going to review Mozilla's tax-exemption status. I don't know what the law is on this but I imagine that there are implications of having such a large chunk of funding come from one entity and having the same entity glean a clear and direct benefit from the not-for-profit organization.

Re:That's weird (1)

mosb1000 (710161) | more than 5 years ago | (#25831945)

Many non-profits obtain all their money from a single source (the Bill and Melinda Gates foundation, for example). Any monetary benefit gained by Google would already be taxed. I guess that the only reason they're interested is because Google makes money. . . but I don't think that means they can't be a legitimate source of funding.

Re:That's weird (3, Informative)

TheRaven64 (641858) | more than 5 years ago | (#25832303)

As I recall, the problem is not a single source, but that it's a single corporate source. Certain classes of tax-exempt status requires a certain percentage of donations to come from individual contributions. This was a problem for the FreeBSD foundation about a year ago. They received a lot more corporate donations than they were expecting, so had to quickly raise a lot of individual contributions before the end of the tax year to retain their non-profit status.

The rules make sense, since if a corporation could be the sole donator to a tax-exempt organisation then every corp would just set up a foundation that received all of its profit, pay no tax, and have the foundation own all of its assets.

Re:That's weird (1)

CheshireCatCO (185193) | more than 5 years ago | (#25832389)

Any monetary benefit gained by Google would already be taxed.

Unless Google also claimed a write-off for the donation, in which case the IRS's interest is understandable.

Re:That's weird (1)

Attila Dimedici (1036002) | more than 5 years ago | (#25832467)

My suspicion is that they are going to review two things. One, whether or not Google can claim a deduction for the money given to Mozilla. Two, whether or not Mozilla should be filing a tax return (and possibly paying taxes if they would show a profit under tax law). On that second one, depending on what they find, that money from Google might qualify as income.

Perhaps they should look at MSN search on IE (0, Troll)

OurGodlivz (833604) | more than 5 years ago | (#25831613)

Perhaps the IRS should look to see how much Microsoft is making off of having MSN be the default in Internet Explorer... After all something has to be default, why not get some money out of it. *Yes, I understand that IE is not a non-profit and thus it is not in the same boat*

Re:Perhaps they should look at MSN search on IE (0)

Anonymous Coward | more than 5 years ago | (#25831787)

IE is not a non-profit, and therefore it is not in the same boat. (Yes, I understand that you pointed this out at the end of your post.)

Another good reason to end corporate taxation (3, Interesting)

MikeRT (947531) | more than 5 years ago | (#25831719)

The law is very rigid today. To start an organization, you have to jump through a lot of hoops and hurdles to be in compliance with everything from labor practices, to filing the right corporate status, to paying the right taxes. It would be a lot easier for society to find creative ways to reorganized itself if there were no corporate taxes.

Besides, corporate taxes are asinine. Not only are the costs transferred to the public in the form of higher costs and lost employment opportunities, most corporations have successfully figured out how to avoid paying most taxes anyway. It'd be better to just cut our losses, tighten up spending, and tax only individuals.

Re:Another good reason to end corporate taxation (3, Interesting)

deraj123 (1225722) | more than 5 years ago | (#25832571)

I love this idea. As an added benefit, voters would actually be directly exposed to the amount of their income that ends up going to the government, rather than having it hidden behind slightly higher prices at every level.

Basically (4, Informative)

Anonymous Coward | more than 5 years ago | (#25831753)

Wow, that's a pretty slanted writeup by ric482...

Back in 2005, before the Mozilla Corporation was created as a for-profit organization, the deal with Google went through the Mozilla Foundation. There was worry that the income derived then would need to be reviewed by the IRS (a large part of the reason the Mozilla Corporation was created in the first place). Mozilla set aside a large part of that income in case that happened and the IRS would end up disagreeing with the status of that income.

The review of that income is basically happening now (and the IRS is probably also looking at what happened since).

Mitchell says it like this [lizardwrangler.com]:

In 2005 the Mozilla Foundation established a "tax reserve fund" for a portion of the revenue the Foundation received that year from Google. We did this in case the IRS (the "Internal Revenue Service," the US national tax agency) decided to review the tax status of these funds. This turns out to have been beneficial, as the IRS has decided to review this issue and the Mozilla Foundation. We are early in the process and do not yet have a good feel for how long this will take or the overall scope of what will be involved.

(Lots of other interesting information in that blog entry, too.)

Solution to the economic crisis (2, Funny)

russotto (537200) | more than 5 years ago | (#25831819)

The IRS seems to have the usual paradigm a bit confused.

1) Find one of the few sectors making a profit
2) Take them down
3) ????

Re:Solution to the economic crisis (4, Funny)

Arthur B. (806360) | more than 5 years ago | (#25832029)

If it moves tax it.
If it still moves, tax it more.
If it's stopped moving, subsidize it.

Floating Cities. (0, Offtopic)

Drakin020 (980931) | more than 5 years ago | (#25832081)

I'd say Venus. There has always been speculation about floating cities on the planet. It's surface area would not be habitable by humans, but at a specific altitude, the atmosphere is just right for human life.

I know it sounds far fetched, but I would be interested in seeing if we could really pull something like this off...Almost Jetsons style.

Bs (0)

Anonymous Coward | more than 5 years ago | (#25832151)

Hummmmmmmmmmm
I wonder how much microsoft pays the government.
If microsoft does not get it way they threaten people & buy you out.

Nothing unusual (2, Informative)

ivoras (455934) | more than 5 years ago | (#25832513)

It's just a way to make sure one company (Google in this case) isn't using a charity (Mozilla in this case) for illegal purposes, like plain old tax evasion. If it comes to that, Mozilla simply needs to reduce the amount of money accepted by Google or rally the community to give a significant amount of money in the form of small individual donations, so the ration of Google vs others comes down.

If it seems hard to rally something that will rival Google's $66 million, a useful frame of perspective might be that the FreeBSD Foundation is working with several times the Mozilla's amount: http://www.freebsdfoundation.org/donate/ [freebsdfoundation.org] and they're managing to deal with it. (OTOH FreeBSD itself brings much money to the top donor companies so there's incentive to do it. Yes, FreeBSD developers are happy with this deal that comes from BSDL.)

Re:Nothing unusual (1)

ivoras (455934) | more than 5 years ago | (#25832605)

Argh, I managed to virtually misplace several orders of magnitude there - FreeBSD Foundation's goal is $300,000 not $300,000,000 :/ - please just ignore the last part of the post.
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