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The IRS vs. Open Source

timothy posted about a year ago | from the why-are-you-depriving-them-of-revenue? dept.

United States 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?"

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Open source equates to freedom. (5, Insightful)

Anonymous Coward | about a year ago | (#44101541)

Which is exactly why the U.S. government is against it.

Re:Open source equates to freedom. (5, Funny)

Anonymous Coward | about a year ago | (#44101559)

Why would the freest country in the world (except, perhaps, Iceland) be against it?

Re:Open source equates to freedom. (3, Interesting)

Anonymous Coward | about a year ago | (#44101663)

Open Source makes it harder(not impossible) to do this: http://en.wikipedia.org/wiki/NSAKEY [wikipedia.org]

Re:Open source equates to freedom. (-1)

Anonymous Coward | about a year ago | (#44101793)

No it doesn't. Case in point: Debian OpenSSL weak key flaw that wasn't discovered for more than 2 years.

Re:Open source equates to freedom. (0)

0123456 (636235) | about a year ago | (#44101873)

No it doesn't. Case in point: Debian OpenSSL weak key flaw that wasn't discovered for more than 2 years.

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.

If the same change had been made to the actual OpenSSL source, it would have been spotted and fixed very quickly.

Re:Open source equates to freedom. (1)

Anonymous Coward | about a year ago | (#44101999)

+1 funny spinmeistering

Re:Open source equates to freedom. (5, Informative)

Anonymous Coward | about a year ago | (#44102069)

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. (2, Insightful)

Anonymous Coward | about a year ago | (#44102043)

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 equates to freedom. (3, Funny)

0123456 (636235) | about a year ago | (#44101779)

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. (1)

Anonymous Coward | about a year ago | (#44101923)

You are joking, right?

Re:Open source equates to freedom. (5, Insightful)

interval1066 (668936) | about a year ago | (#44102017)

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.

Re:Open source equates to freedom. (1, Informative)

interkin3tic (1469267) | about a year ago | (#44102241)

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. (4, Insightful)

geek (5680) | about a year ago | (#44102297)

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 equates to freedom. (5, Informative)

tbannist (230135) | about a year ago | (#44102163)

Hmm, according to the Heritage Foundation [heritage.org] , the U.S. ranks 10th, and according to the Fraser Institute [fraserinstitute.org] the U.S. ranks 7th. Freedom House's ranking doesn't easily lend itself to ranking countries in the top category. Heritage foundation top 10:

1 - Hong Kong
2 - Singapore
3 - Australia
4 - New Zealand
5 - Switzerland
6 - Canada
7 - Chile
8 - Mauritius
9 - Denmark
10 - United States

Fraser top 10 (Chapter 3, page 9):

1 - New Zealand
2 - Netherlands
3 - Hong Kong
4 - Australia
5 - Canada
6 - Ireland
7 - United States of America
8 - Denmark
9 - Japan
10 - Estonia

So they seem to be in agreement that Australia, New Zealand, Canada, Hong Kong are freer than the United States.

Re:Open source equates to freedom. (3, Interesting)

Jodka (520060) | about a year ago | (#44102243)

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:

1. Hong Kong
2. Singapore
3. Australia
4.New Zealand
5. Switzerland
6. Canada
7. Chile
8. Mauritius
9. Denmark
10. United States.

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 (5, Interesting)

Technician (215283) | about a year ago | (#44102423)

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. (4, Interesting)

NoNonAlphaCharsHere (2201864) | about a year ago | (#44102013)

Any government intelligence organization that DOESN'T have people like Richard Stallman on its "subversives" list isn't paying attention. Stallman is, by definition the kind of person that Big Government Spooks are in place to keep an eye on. Not saying I'm against what he has to say, just stating reality.

Open Source is similar to the Tea Party ... (5, Insightful)

drnb (2434720) | about a year ago | (#44102037)

Open Source is similar to the Tea Party. It advocates for individual involvement, responsibility and rights. It wishes to downplay the involvement and power of government and corporations.

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 is similar to the Tea Party ... (2, Insightful)

MightyMartian (840721) | about a year ago | (#44102055)

I wasn't aware open source was inherently against Mexican immigrants or black presidents.

Re: Open Source is similar to the Tea Party ... (2, Insightful)

Anonymous Coward | about a year ago | (#44102097)

treating someone as equals does not mean you hate them.

Re:Open Source is similar to the Tea Party ... (2)

DaHat (247651) | about a year ago | (#44102211)

I wasn't aware open source was inherently against Mexican immigrants or black presidents.

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 ... (1, Insightful)

cold fjord (826450) | about a year ago | (#44102245)

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 ... (1)

Anonymous Coward | about a year ago | (#44102345)

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.

Yep, the venerable Herm Cain, who mysteriously dropped out of the race in the face of pretty minor "unfounded allegations" about his personal relationships. They sure supported him, all right! They gave him their full backing for a good two and a half weeks. Herm Cain was a hood ornament for the conservatives; just enough popularity to "strongly support" while they knew for sure he couldn't come close to winning the primary.

Re:Open Source is similar to the Tea Party ... (1, Insightful)

geek (5680) | about a year ago | (#44102399)

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:Open Source is similar to the Tea Party ... (1)

FilmedInNoir (1392323) | about a year ago | (#44102093)

I support open source and ... 9/11 WAS A CONSPIRACY! 9/11 WAS A CONSPIRACY!

Re:Open Source is similar to the Tea Party ... (0)

Anonymous Coward | about a year ago | (#44102347)

No it wasn't. The US government has shown no reason whatsoever to not trust them. Why would you not believe the US government report on 9/11? Why would you not trust that the investigation was thorough and truthful?

Tinfoil hatters. So fucking stupid.

Re:Open Source is similar to the Tea Party ... (0, Troll)

Anonymous Coward | about a year ago | (#44102115)

Funny... Very funny. The "Tea Party" is for: government control of public morality, limited access to things that won't kill you (birth control, for example), and free access to things that will (i.e. guns). They are for the freedom to limit other people's freedoms, and for the tyranny of the majority over the minority; unless they find themselves in the minority that is, in which case they are for the tyranny of their minority over the majority. Tea Partiers are all for government handouts when it suits them, for example: "Government: hands off my Social Security" signs at most Tea Party rallies in 2010. They are also for massive subsidies to large corporations, especially when they are of the military-industrial variety, or of the oil-producing one. But no subsidies to people who actually need them, noooooooo...

In short, the Tea Party is the GOP, and the GOP is the Tea Party. Don't let Fox News blind you. There's no such thing as "libertarianism". It's only a bunch of teenagers and retirees screaming "Gimme mine!".

Re:Open Source is similar to the Tea Party ... (3, Insightful)

Anonymous Coward | about a year ago | (#44102253)

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. (0)

Anonymous Coward | about a year ago | (#44102351)

Butbutbut..... Laaaaaaaaaaaaaaaaaaaaaand of the freeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee?

Liberty (5, Insightful)

intermodal (534361) | about a year ago | (#44101549)

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 (2, Insightful)

Anonymous Coward | about a year ago | (#44101661)

Tinfoil hat? Check.

Tax dodge (5, Insightful)

SirGarlon (845873) | about a year ago | (#44101709)

Well, TFA says:

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.

so maybe the IRS was concerned that open-source consortia are some kind of tax dodge.

Re:Tax dodge (5, Funny)

CannonballHead (842625) | about a year ago | (#44101755)

Oh come on now. If your answer for why the IRS does something doesn't include something evil, it's clearly not the right answer. ;)

Re:Tax dodge (3, Insightful)

intermodal (534361) | about a year ago | (#44101809)

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:Tax dodge (5, Informative)

benjfowler (239527) | about a year ago | (#44101833)

Consumption taxes weigh particularly heavily on people with little money.

Re:Tax dodge (2)

intermodal (534361) | about a year ago | (#44101885)

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.

Re:Tax dodge (2)

fast turtle (1118037) | about a year ago | (#44102025)

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.

Re:Tax dodge (2)

yourmommycalled (2280728) | about a year ago | (#44102171)

No it wouldn't impact the rich and Congress. Congress critters get free health care, food, haircuts, travel, living expenses (only $3000 though),mail, etc. The rich rarely "spend" or "earn" anything, it all handled through a series of shell companies. It is common practice for a company owner to slap a sign on the side of their car and then claim it is a "business expense" and deduct the cost of purchase, gas and maintenance as a tax deduction. My neighbor does exactly that and drives a BMW instead of a Ford/Chevy/Nissan/Toyota like everyone else in the neighborhood and brags that he can get away with it. The multi-million house is provide by the "company" so there are no "expenses" Air conditioner goes out, the company pays for repairs and it is a tax deduction

Re:Tax dodge (1)

Rob Riggs (6418) | about a year ago | (#44102299)

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 of the shares I bought and the brokerage commission? Or do I have to pay $110 in taxes on that trade?

Re:Tax dodge (2)

MightyMartian (840721) | about a year ago | (#44102067)

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.

Re:Tax dodge (3, Interesting)

SirGarlon (845873) | about a year ago | (#44102003)

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?

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.)

Re:Tax dodge (0)

Anonymous Coward | about a year ago | (#44102409)

Not really. Income tax wasn't "set up" by the 16th Amendment. It was given an exemption to the direct tax clause in Article 1 so it wouldn't have to be apportioned among the states, but income tax was legal before the 16th Amendment. Further more, the 16th Amendment gives Congress the power to collect an income tax without apportionment among the states, but it certainly doesn't require it.

Re:Tax dodge (0)

Anonymous Coward | about a year ago | (#44102263)

Consumption based taxes on a national level would still be collected by the IRS. They would be collecting that from businesses instead of individuals... and you would still have the rich dodging that by making purchases outside of US territories. Then you'll have the IRS doing business shakedowns Mafia style.

Re:Tax dodge (0)

Anonymous Coward | about a year ago | (#44102131)

Of course it would investigate people seeking tax breaks on potentially shaky grounds...

Wait a moment...I'm not allowed to shift all my developers into an "Open Source" 501(c)(3) and pay them with "donations"? Wow.

In reality, there are only about three dozen open source foundations that are both legit tax-exempt organizations and handle enough money for the IRS to care. Apart from those, any other "Open Source" 501(c)(3) with a large number of paid employees is probably a tax dodge.

Re:Liberty (4, Insightful)

geekoid (135745) | about a year ago | (#44101811)

I'll let you in on a little secret:
Libertarians are not pro-liberty.

Re:Liberty (2)

intermodal (534361) | about a year ago | (#44101851)

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 (4, Insightful)

NicBenjamin (2124018) | about a year ago | (#44102089)

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:Liberty (2)

oodaloop (1229816) | about a year ago | (#44102139)

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.

but! but! Microsoft said they were tax cheats!! (1)

Anonymous Coward | about a year ago | (#44101571)

And of course, we know how the Government listens to Microsoft et al.

Valid Reasons (4, Informative)

Anonymous Coward | about a year ago | (#44101619)

"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 (3, Informative)

Anonymous Coward | about a year ago | (#44101841)

"These organizations are requesting either 501(c)(3) or 501(c)(6) exemption in order to collaboratively develop new software. The members of these organizations are usually the for-profit business or for-profit support technicians of the software."

The fact that for profit businesses are using open source as a tax break excuse is reason enough for investigation. The IRS wants to collect taxes, not give tax breaks. Of course it would investigate people seeking tax breaks on potentially shaky grounds...

Yes, exactly. There are many abuses of 'non-profit' status.

In my entrepreneur ship class, a classmate of mine did a project for a non-profit startup.To make a long story short, she was worried that she wouldn't be able to get investors. The prof assured her that wouldn't be the case because non-profit is just a tax status - you're just limited as to what you can do with those profits. In other words, you can get as rich as you like with a non-profit and make your investors rich too.

People get rich with charities too. That's why if you want to give to charity, do it outside of big national charities - your money will go a lot farther.

Re:Valid Reasons (4, Informative)

Sponge Bath (413667) | about a year ago | (#44101939)

The IRS wants to collect taxes...

More correctly: the IRS is required by law (written by congress and signed by the president) to collect taxes and make determinations of status related to taxing.

Re:Valid Reasons (2)

RobertLTux (260313) | about a year ago | (#44101981)

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??

scrutiny is normal (4, Funny)

OglinTatas (710589) | about a year ago | (#44101637)

Review and investigation of applications is to be expected in any organization.

Only the FISA court approves applications without review

Re:scrutiny is normal (1)

iggymanz (596061) | about a year ago | (#44101687)

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 (4, Insightful)

NicBenjamin (2124018) | about a year ago | (#44102189)

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:scrutiny is normal (1)

Sponge Bath (413667) | about a year ago | (#44102045)

*Nobody* expects the FISA Inquisition! Our chief weapon is surprise, surprise and fear, fear and surprise. Our *two* weapons are fear and surprise, and lack of oversight. Our *three* weapons are fear and surprise and lack of oversight and an almost fanatical dedication to the show Firefly. Our *four*... No... Amongst our weapons... Amongst our weaponry are such elements as fear, sur- I'll come in again.

Because it's a threat to the corporations (0, Troll)

TWiTfan (2887093) | about a year ago | (#44101657)

And that's who the government REALLY works for.

Re:Because it's a threat to the corporations (1)

geekoid (135745) | about a year ago | (#44101775)

some of the biggest companies in the world use Open Source.

Re:Because it's a threat to the corporations (0)

Anonymous Coward | about a year ago | (#44102391)

Both Microsoft and Apple uses and contributes heavily to open source.

Re:Because it's a threat to the corporations (1)

NicBenjamin (2124018) | about a year ago | (#44102279)

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 these applications to somebody who act6ually knows what he's doing.

In other words this is anti-corporate.

Re:Because it's a threat to the corporations (1)

dkleinsc (563838) | about a year ago | (#44102419)

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.

The new faschism (-1)

Anonymous Coward | about a year ago | (#44101667)

This is just how it works, big companies control politicians, big business would like to see FOSS go away, the same way they want the immegration crap so they can hire cheaper labor and drive down wages even more, follow the money folks!

Re: The new faschism (1)

Xakh (1251870) | about a year ago | (#44102029)

right, Google is a small company, and most corporations like having their bottom lines trashed by having to use microsoft server in their datacenters.

At the Risk of Disgust for Defending the IRS ... (5, Insightful)

eldavojohn (898314) | about a year ago | (#44101701)

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?

Re:At the Risk of Disgust for Defending the IRS .. (2)

Crash24 (808326) | about a year ago | (#44101823)

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.

Re:At the Risk of Disgust for Defending the IRS .. (3, Insightful)

gnasher719 (869701) | about a year ago | (#44101881)

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:At the Risk of Disgust for Defending the IRS .. (2)

king neckbeard (1801738) | about a year ago | (#44101991)

I'd be curious as to a realistic example of this. The closest thing I can think of would be hardware drivers, but there are other parties that benefit from the application of that software. Maybe some drivers for hardware that is used only internally within a system, but that seems pretty unlikely to me.

Re:At the Risk of Disgust for Defending the IRS .. (0)

Anonymous Coward | about a year ago | (#44102157)

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.

Why, because the people need more ETL software?

This might hurt some egos, but no matter how much you love your desktop OS,
Open Source Software does not categorically benefit the public in a way that satisfies requirements for tax exempt status.

Re:At the Risk of Disgust for Defending the IRS .. (2)

NicBenjamin (2124018) | about a year ago | (#44102343)

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 they were actually giving these projects a hard time we probably would have heard about it on Slashdot before now.

Re:At the Risk of Disgust for Defending the IRS .. (1)

0123456 (636235) | about a year ago | (#44101829)

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.

Re:At the Risk of Disgust for Defending the IRS .. (0)

Anonymous Coward | about a year ago | (#44101871)

That would be the if they present a legitimate reason part of the sentence that you quoted yet failed to read. If the IRS publishes these things and people know why some groups get more scrutiny than others and those reasons can be discussed publicly, is it a bad thing for them to try to do their jobs more effectively?

Re:At the Risk of Disgust for Defending the IRS .. (1)

0123456 (636235) | about a year ago | (#44101895)

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?

Re:At the Risk of Disgust for Defending the IRS .. (0)

Anonymous Coward | about a year ago | (#44101965)

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?

Ummm, you do know that ordinary people who try to do their taxes themselves and do nothing wrong but fill something out in a round-about manner are automatically flagged for a higher chance of auditing than someone who went to H&R block and said, "I'm stupid, do my taxes for me." Right? Are you saying that this legitimate reason is discrimination by the IRS?

Re:At the Risk of Disgust for Defending the IRS .. (1)

gl4ss (559668) | about a year ago | (#44101911)

it's also entirely possible to operate in pure for profit fashion while doing open source consulting etc while labeling it as a nonprofit.

Re:At the Risk of Disgust for Defending the IRS .. (1)

FrankDrebin (238464) | about a year ago | (#44101975)

Great comment. Not only does due scrutiny result in correct non-profit status, but it improves the value of the distinction. We're all better off with not-for-profits being a little more ivy-league and a little less online-degree-mill.

Re:At the Risk of Disgust for Defending the IRS .. (0)

Anonymous Coward | about a year ago | (#44102127)

The only thing that is wrong about the IRS is that they exist. Every other issue is just inevitable bug caused by that initial design flaw.

Re:At the Risk of Disgust for Defending the IRS .. (1)

DrJimbo (594231) | about a year ago | (#44102295)

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.

Re:At the Risk of Disgust for Defending the IRS .. (1)

Sarten-X (1102295) | about a year ago | (#44102371)

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 an old idea. Every lawsuit is an us-against-them fight for survival, rather than a search for justice. Every wound is a tragedy, and every windfall is a triumph, rather than just the caprices of circumstance. Every story is a new demon being unleashed upon the world.

Slashdot is just as bad as Fox News. Rather than twisting facts to fit the story, Slashdot twists the circumstances to fit the mob's hatred du jour.

For-profit business aspect (5, Insightful)

Todd Knarr (15451) | about a year ago | (#44101705)

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.".

Right in TFA (2)

T.E.D. (34228) | about a year ago | (#44101749)

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.

IRS Cooperating with NSA (0)

Anonymous Coward | about a year ago | (#44101753)

Maybe it is from the NSA cooperating with or using the IRS. Nothing they'd hate more than software that they can't bully backdoors into, not only is it balkanized by design compared to the corporates but the source code being open makes it hard to hide any if they were to make it into builds. Normally that'd be paranoid conspiracy theory thinking but now it seems very reasonable.

No (1)

geekoid (135745) | about a year ago | (#44101757)

Some companies where trying to use open source to mean they didn't need to pay taxes.

Re:No (0)

Anonymous Coward | about a year ago | (#44102035)

Citation needed.

IRS Uses Open Source Products (2)

dringess (552168) | about a year ago | (#44101769)

IRS internally uses JBoss and Tomcat, both open-source Java application servers. They also use PrimeFaces and the Spring Framework.

ISSA Lie (1)

opusbuddy (164089) | about a year ago | (#44101785)

Or so he might say...

Malice or Incompetence? (1)

mfwitten (1906728) | about a year ago | (#44101835)

Never ascribe to malice that which is adequately explained by incompetence.

"I'm going to work for the IRS" said no competent, industrious individual. Ever.

Motives (1)

Princeofcups (150855) | about a year ago | (#44101857)

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" (1)

puddingebola (2036796) | about a year ago | (#44101971)

When someone downloads and installs Open Source Software, they may receive intangible Goodwill as income, which may be a taxable event. Expect a notice from the IRS in the coming weeks notifying you of unpaid taxes on imaginary income you may have received from your downloads.

Re:A Taxable "Event" (0)

Anonymous Coward | about a year ago | (#44102319)

They can have *all* my bitcoins...

Am I crazy? (1)

peon_a-z,A-Z,0-9$_+! (2743031) | about a year ago | (#44101997)

Why has no one published an article listing "Organizations likely to not pay for professional tax advice and do it on their own fall prey to IRS suspicion."

I've filed as a tax exempt organization though with the help of a CPA - it's not a trivial task. If people really are so eager to make these crazy conspiracy correlations let's at least discuss the fact that those groups that are being binned together all are also likely to try to file on their own.

Trade speed for bureaucracy? Heckuva job, public! (0)

Anonymous Coward | about a year ago | (#44102057)

Now instead of taking very real potentially problematic applications and scutinizing them more (while allow completely non-problematic TEGE's to fast track,) instead *every* group will get scrutinized. Job security for the clerks/agents, and no common sense. Just plain bureaucracy.

Good job, public!

Learn to read, please, before posting (-1)

Anonymous Coward | about a year ago | (#44102101)

The Democrat talking point (intended to distract long enough for things to "cool-off") is that the IRS was actually targeting EVERY special interest. This was fueled by release of part of a deposition indicating that one employee of the IRS thought that the matter was not political and the waving-about of IRS documents which contain the words "Tea party" AND "progressive". The Democrats are counting on a general public, many of whom get their news from Comedy Central or from the alphabet networks, hearing some headline about the IRS going after liberals too (with no actual facts or details) and therefore writing-off the whole scandal.

If you actually READ the IRS documents, you see that they directed employees to treat "Tea Party" groups DIFFERENTLY from "Progressive" groups. The mere fact that the two terms appear together in a document DOES NOT mean that they were being treated the same.

Furthermore, Democrats are pretending liberal groups were targeted under Bush because the IRS back then examined the tax exempt status of the NAACP... but this too is a fake equivalence; First, nobody prevented the NAACP from getting their tax exempt status which they've had for decades (nor was an application of theirs left "in limbo" for years THROUGH TWO ELECTION CYCLES). Second, the already tax-exempted NAACP was, during the Bush years, blatantly advertizing against individual political candidates (like the ad they ran against Bush trying to blame him for the death of a black man in Texas) this was an actual act rather than a theory that they might engage in such activity in the future (the argument for persecuting the Tea Partiers). And Third, after the investigation, the NAACP still had its tax exempt status (and it got to have that status throughout the investigation time i.e. it was never "put on hold")

The current IRS scandal was the targeting of groups that disagreed with President Obama (the Tea Party, Pro-Lifers, and Pro-Israel groups). Period. No other groups had their private information leaked to their political opponents by IRS employees (a federal crime, which the Obama admin just cannot figure out how to investigate...)

I MISS STEVE JOBS!! (-1)

Anonymous Coward | about a year ago | (#44102119)

I miss Steve Jobs so much!! He was an absolute GENIUS when it comes to technological innovation. Apple is doomed without him. Uhhh IRS vs Open Source? What are you talking about? Steve Jobs is dead and Android has more users now than Apple has iPhone users. I'm gonna cry.

Re:I MISS STEVE JOBS!! (1)

kthreadd (1558445) | about a year ago | (#44102405)

This must be hard for you.

This is part of the currents government lust (1)

Nyder (754090) | about a year ago | (#44102147)

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 the world for that matter. Time for some big changes.

Is everyone here under the age of 21? (2)

cp5i6 (544080) | about a year ago | (#44102309)

did we forget the old mantra.

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.

ruling class vs serfs (0)

dalesyk (302267) | about a year ago | (#44102383)

The ruling class in Washington uses all their power to stop anyone who stands in the way of them controlling everything. Groups that promote freedom are #1 on their hit list.

I would have expected the DOJ (0)

Anonymous Coward | about a year ago | (#44102395)

I would have expected the DOJ to be more interested in OS/FS. AFAIK, they look into all the anti-trust cases. When you're giving stuff away, it's arguably dumping.

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