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X.Org Foundation Loses 501(c)3 Non-Profit Status

timothy posted 1 year,20 days | from the swimming-in-the-fine-print dept.

Graphics 208

An anonymous reader writes "The X.Org Foundation, which drives the X.Org Server projects, Mesa, and Wayland open-source programs, had its tax-exempt status revoked by the IRS. It turns out the X.Org Foundation had put in quite a lot of work to become a non-profit organization, with guidance from the Software Freedom Law Center. They got in trouble after failing to routinely file their taxes on time. There's also been a host of other X.Org accounting errors in recent years. There was also the recent news of the IRS going after open-source projects, too."

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that crazy old IRS (-1, Flamebait)

turkeydance (1266624) | 1 year,20 days | (#44684939)

up to their tricks, again

Re:that crazy old IRS (4, Informative)

Anonymous Coward | 1 year,20 days | (#44684985)

OK, I understand people don't like to TRFA, but did you not even RTF summary? What tricks? The "trick" of revoking tax exempt status for orgs that fail to properly file the required paperwork?

Re:that crazy old IRS (1)

Anonymous Coward | 1 year,20 days | (#44686443)

OK, I understand people don't like to TRFA, but did you not even RTF summary? What tricks? The "trick" of revoking tax exempt status for orgs that fail to properly file the required paperwork?

It's one wierd trick.

Re:that crazy old IRS (-1, Flamebait)

shentino (1139071) | 1 year,20 days | (#44686925)

The IRS is just another TLA lapdog of the powers that be.

The powers that be are lovers of proprietary software, and see open source as "unfair competition"

I'm therefore not surprised that they're using dirty tricks

No one to blame but themselves (5, Insightful)

barlevg (2111272) | 1 year,20 days | (#44684971)

Seriously. How hard is it to file your taxes on time? Or to hire someone to do it for you?

Re:No one to blame but themselves (5, Funny)

PolygamousRanchKid (1290638) | 1 year,20 days | (#44685181)

How hard is it to file your taxes on time?

How hard is it to deliver your release on time?

Hey, we're software folks . . . we just don't deliver on time. The IRS should know this, and cut all software folks some slack on that April 15th date.

Re:No one to blame but themselves (3, Insightful)

Gerzel (240421) | 1 year,20 days | (#44685207)

software folks if working with money of sufficient amounts should hire an accountant.

Re:No one to blame but themselves (5, Informative)

ShaunC (203807) | 1 year,20 days | (#44686213)

> software folks if working with money of sufficient amounts should hire an accountant.

They have one, but he apparently didn't do his job. FTFA:

Stuart Kreitman, the X.Org Foundation accountant and Oracle employee, wrote during the Board of Directors' IRC meeting this week, "The status of the 501c3 is lost because we (me) failed to file the 3 past years' tax returns on time. Note that we've Never filed returns since our first re-organization to the LLC in 2005. I was taken by surprize that the IRS hit us so rudely. I've had little issues with my own returns and have always found them to be reasonable and friendly."

Re:No one to blame but themselves (4, Funny)

M. Baranczak (726671) | 1 year,20 days | (#44686311)

...Oracle employee...

I should have known.

Re:No one to blame but themselves (1)

shentino (1139071) | 1 year,20 days | (#44687243)

You suspect sabotage?

Re:No one to blame but themselves (1)

dpilot (134227) | 1 year,20 days | (#44686439)

The same timely delivery issues could be said of defense contractors and weapons systems.

Re:No one to blame but themselves (5, Informative)

QuasiEvil (74356) | 1 year,20 days | (#44685227)

Yeah, no sympathy here. I sit on the board of a local historic preservation society, and we're 501c3. We pay our accountant something like $1000/year (some of her rate is counted as an in-kind donation, but nothing we do is really that complicated) and she keeps the paperwork current and straightened out. I'm relatively sure that X.org runs with a bigger budget than we do and could find accounting services, so this is just gross incompetence on their part.

Re:No one to blame but themselves (0, Insightful)

Anonymous Coward | 1 year,20 days | (#44686637)

Gross incompetence from X developers, what a surprise?!

Re:No one to blame but themselves (0)

Anonymous Coward | 1 year,20 days | (#44686815)

What makes you think they "run[s] with a bigger budget"?
Unlike your "local historic preservation society" they drive no functions, make no appeals to the public or city hall, and produce no physical goods of any kind.

For all I know, X.org is all in the cloud; Just passing down the torch from one bored hacker whose willing to put together the patches, to the next. A 6 digit password to a mailing list and another pass to the main repository... Doesn't take much more then that :D

Re:No one to blame but themselves (4, Insightful)

jellomizer (103300) | 1 year,20 days | (#44685271)

Exactly, I love all the woe is me, big brother is out to get me. While you fail to play by the rules set in place.

You want Tax Exempt status, good, make sure you follow the rules to keep it.

Re:No one to blame but themselves (1, Insightful)

njnnja (2833511) | 1 year,20 days | (#44685637)

The problem is that the rules are phenomenally complex. It's easy to say that they should have just followed the rules, but IRS rules are a serious PITA to satisfy. It is quite likely that no matter what Xorg had done, the IRS could have found some error in their compliance that would enable them to revoke 501c3 status.

So the real issue is that by making it so hard to comply with the rules, regulations, and laws, it raises the question of whether the government is using "selective enforcement" to punish people, organizations, and views that they don't like. Did this happen because of a general review of nonprofits, in which case this was a simple case of good enforcement, or are "hackers" being targeted by the government (for lots of reasons, e.g. resistance to NSA monitoring), and any one of a number of technical violations would have led to the IRS' actions? In that way it is similar to the Aaron Schwartz case, and is something that should be noted, if not actively resisted.

Re: No one to blame but themselves (0)

Anonymous Coward | 1 year,20 days | (#44685949)

Filing a tax return on time is a complicated rule that's too hard to follow? Drop the tinfoil hat...LOL at X.org being a victim of political persecution. Nobody knows what X.org is.

Re:No one to blame but themselves (0)

Anonymous Coward | 1 year,20 days | (#44686279)

BULLSHIT. If you're U.S. based, and you don't pay your taxes, you can expect the IRS to make you hate your life.

Bottom line: hire a tax accountant who isn't an incompetent fool and make sure you pay your fucking taxes on time.

Re:No one to blame but themselves (0)

shentino (1139071) | 1 year,20 days | (#44687271)

The whole point of being non profit is that you don't OWE taxes in the first place.

Paperwork fees, sure. But not taxes.

They could kepe (2)

Firethorn (177587) | 1 year,20 days | (#44686543)

The problem is that the rules are phenomenally complex.

Sure they are, but that doesn't stop 90% of people from filing on time, or at least filing for the automatic extension. For that matter, nearly every church in the country manages to do the same.

I get the idea that the IRS doesn't revoke the status for 'simple' mistakes, they revoke it for major things like not filing for 3+ years. If they're acting within the rules of an exempt organization, even an audit isn't going to turn up more than minor fines at most, and at best it'd amount to IRS agents helping to fix the paperwork.

FTA:

"The status of the 501c3 is lost because we (me) failed to file the 3 past years' tax returns on time. Note that we've Never filed returns since our first re-organization to the LLC in 2005.

Re:They could kepe (1)

jedidiah (1196) | 1 year,20 days | (#44686923)

>> The problem is that the rules are phenomenally complex.
>
> Sure they are, but that doesn't stop 90% of people from filing on time,

Most people have taxes that are trivial because they have no money to speak of and do nothing interesting financially.

Is that you Joe?

Re:No one to blame but themselves (1)

nairnr (314138) | 1 year,20 days | (#44686697)

The problem is that the rules are phenomenally complex. It's easy to say that they should have just followed the rules, but IRS rules are a serious PITA to satisfy. It is quite likely that no matter what Xorg had done, the IRS could have found some error in their compliance that would enable them to revoke 501c3 status. So the real issue is that by making it so hard to comply with the rules, regulations, and laws, it raises the question of whether the government is using "selective enforcement" to punish people, organizations, and views that they don't like. Did this happen because of a general review of nonprofits, in which case this was a simple case of good enforcement, or are "hackers" being targeted by the government (for lots of reasons, e.g. resistance to NSA monitoring), and any one of a number of technical violations would have led to the IRS' actions? In that way it is similar to the Aaron Schwartz case, and is something that should be noted, if not actively resisted.

They can't be so complex... If you don't understand them you get someone who does understand. Put away the tinfoil hat about selective enforcement of a software group. Enforcement of the rules is a good thing. Just because you may support the group that had the action taken against them doesn't mean it wasn't correct. It is 100% their fault for not maintaining compliance with the requirements if they valued that status...

Re:No one to blame but themselves (1)

jellomizer (103300) | 1 year,20 days | (#44687159)

So they couldn't find a GNU Tax software. So it must be a political reason.

Re:No one to blame but themselves (0)

shentino (1139071) | 1 year,20 days | (#44687261)

It could also be corporate lapdogging, considering that open source in general is an unwelcome thorn in the corporate side.

Re:No one to blame but themselves (1)

i kan reed (749298) | 1 year,20 days | (#44685277)

Well, organizational taxes are substantially more complex. Lacking a full-time accountant(or at least a part time one on retainer) would make it really easy to get overwhelmed.

Re:No one to blame but themselves (3, Informative)

h4rr4r (612664) | 1 year,20 days | (#44685345)

No really a couple thousand a year would likely cover it. They are not that huge an organization.

Re:No one to blame but themselves (3, Interesting)

JWW (79176) | 1 year,20 days | (#44685545)

This is a scam from the IRS.

They are doing this to many, many non-profit organizations. Quite a few non-profit organizations are being hit by this and the IRS is taking advantage of the general disorganization and small size of a lot of non-profit groups to pocket themselves a tidy sum.

The scam goes like this. New policies enacted by the IRS now require non-profits to fill out a card verifying their non-profit status every three years. Now this is simple and easy to do, but its also simple and easy to forget to do. Its even easier to forget when your organization turns over its treasurer every year or two. Also if your organization is part of a larger national organization, it doesn't matter, the IRS is targeting the smallest unit of every non-profit organization. Membership in larger state and national groups of your non-profit do not cover your smaller group.

The IRS's solution if you forget to register is to allow you to re-register at a later date and pay a FINE.

So that's how the shakedown goes. The IRS is making good money with this enforcement racket that they've created.

Re:No one to blame but themselves (0)

Anonymous Coward | 1 year,20 days | (#44685623)

Yeah, if only there was some sort of reminder software they could use, so they won't forget to file the appropriate forms on time.

But naw, that's just crazy pie-in-the-sky talk. How could a group of software professionals be expected to know how to set a reminder for themselves so they don't forget about filing their fucking taxes on time.

Re:No one to blame but themselves (2)

mark-t (151149) | 1 year,20 days | (#44685833)

Okay.... so if you forget to reregister in a timely fashion, you pay the fine, reregister, and get your status back.

It seems not terribly unlike letting your driver's license expire... if you forget about it and end up needing it for something (say you were in an accident or something), you'll pay a rather nasty fine... but you can still renew it and get a new one, as long as the time period since it expired hasn't been too long.

Oh come off it (3, Insightful)

Sycraft-fu (314770) | 1 year,20 days | (#44685873)

It is not hard to remember, in particular because with an organization of any reasonable size you'd want to hire an accountant to do your taxes. If you are a non-profit, you'd hire an accountant who knows how to deal with that.

Any business taxes, profit or non-profit, are a bit complex and this isn't unique to the US. So you hire an accountant. Just part of doing business. My parents used to run a small business in Canada, about 5 employees including themselves. They hired an accountant to do their taxes. It wasn't that expensive and the accountant made sure everything was in order and the Canadian government was happy.

Well same shit here. X.org should have paid someone (or some firm) a couple of grand a year to do their tax accounting.

Re:Oh come off it (1)

JWW (79176) | 1 year,20 days | (#44686139)

Small, all volunteer organizations with virtually no budget are being hit by this as well. They really can't afford accountants.

I know that these rules are easy to comply with, but they're also easy to miss. Much like rebates and other consumer programs, the system is designed with the idea that many will miss/skip/forget to do the easy tasks that the program requires, and enable the IRS to make money.

Re:Oh come off it (-1)

Anonymous Coward | 1 year,20 days | (#44686899)

Small, all volunteer organizations with virtually no budget are being hit by this as well. They really can't afford accountants.

I know that these rules are easy to comply with, but they're also easy to miss. Much like rebates and other consumer programs, the system is designed with the idea that many will miss/skip/forget to do the easy tasks that the program requires, and enable the IRS to make money.

Get rid of volunteer organizations, create a need vacuum. Oh, look, government has marched in with new entitlement programs to fill the void. Thank goodness!

Re:Oh come off it (0)

Anonymous Coward | 1 year,20 days | (#44686945)

Ridiculous, anyone that is employed knows that April 15th is tax day. The form they have to file is a 990, all they have to do is log onto Guidestar (free) and they can look at thousands of 990s. Pick an org that is like them, and figure it out.

If you want the benefit of non-profit status, then you should be able to complete the form. BTW, in order to get the status, they had to file a pretty detailed application. If they could manage that, they could manage the 990 (or hire a part time accountant). Million dollar orgs don't even need full time accountants.

This is not about the IRS "making money". It is about ensuring people don't abuse the non-profit system.

Re:No one to blame but themselves (1)

shentino (1139071) | 1 year,20 days | (#44687229)

Harder than it looks.

The Gentoo Foundation ran into the same kind of trouble don't forget.

Failing to file taxes? (2)

Anonymous Coward | 1 year,20 days | (#44684979)

Why do you have to file taxes if you are tax-exempt?

Re:Failing to file taxes? (5, Informative)

dicobalt (1536225) | 1 year,20 days | (#44684989)

To prove that you are still in a position of being tax exempt?

Re:Failing to file taxes? (0)

Anonymous Coward | 1 year,20 days | (#44685467)

To prove that you are still in a position of being tax exempt?

To prove that you are in a position to NOT have to pay taxes. And yes, you better believe they're going to audit that, as you better have a damn good reason to NOT pay taxes year after year when the other 99% have to.

Re:Failing to file taxes? (0)

Anonymous Coward | 1 year,20 days | (#44685827)

Except according to brother Mitt, 47% don't pay any taxes.

Tax exempt isn't magic (4, Insightful)

Sycraft-fu (314770) | 1 year,20 days | (#44685987)

You don't get awarded tax exempt status and then are allowed to do as you please. If that were the case, every company ever would start out as a charity, get tax exempt status, and then change over.

So you have to file and show that your activities still warrant tax exempt status, that you aren't violating the rules for it. For example suppose you run a non-profit and you get a massive donation, some billionaire leaves you a billion dollars. You decide cool, you'll pay all of it to yourself as salary for that year. I mean the entity is still "non-profit" right? Your salary is a cost, so no profit was made!

Ummm... no. You'd get in all kinds of trouble for that. Doesn't matter what kind of games you tried to play. Hence, you have to file taxes to show that your operations are indeed non-profit, that the money you receive goes to pay for the operation of your organization, not to enrich yourself.

If you want an organization to enrich yourself, that's fine, but that is called a business, and you have to pay taxes on that.

Solution (0)

Cypher, Lou (2759757) | 1 year,20 days | (#44684983)

Abolish the IRS and return to the days of ERS or external revenue service.

Re:Solution (5, Funny)

M. Baranczak (726671) | 1 year,20 days | (#44685105)

"We should tax all foreigners living abroad." - Monty Python

The British Empire did this successfully for hundreds of years. It's a pretty good revenue model, don't knock it.

Re:Solution (2)

xaxa (988988) | 1 year,20 days | (#44685219)

"We should tax all foreigners living abroad." - Monty Python

The British Empire did this successfully for hundreds of years. It's a pretty good revenue model, don't knock it.

The US is one of the few countries that tax it's own citizens while they live abroad. My (half) American friend has to fill out a US tax return every year, although since he lives in the UK the tax he already paid here counts towards (and exceeds) the US requirement.

Re:Solution (1)

h4rr4r (612664) | 1 year,20 days | (#44685369)

Actually that is pretty common and your friend can deduct that tax if the UK is a tax treaty member and I am almost sure they are.

This is for a very simple reason, without it all the big earners would simply have their pay given to them in another nation.

Re:Solution (2)

xaxa (988988) | 1 year,20 days | (#44685519)

If I move to Bermuda I'd pay no tax to the UK.

http://rt.com/usa/americans-refuse-citizenship-tax-317/ [rt.com] "The United States is the only country out of 34 in the Organization for Economic Co-operation and Development (OECD) that continues to tax citizens regardless of where they live around the world."

Re:Solution (0)

Anonymous Coward | 1 year,20 days | (#44685877)

No, that wouldn't work, they'd have to physically move there not just have their pay land in a bank account in a foreign nation.

Re:Solution (1)

Dputiger (561114) | 1 year,20 days | (#44685427)

There's no such thing as a half-citizen of a country. You are a citizen, a permanent legal immigrant, a temporary visitor with a visa, or an illegal immigrant. Taxation varies accordingly. There may even be a category or two in between those, like dual citizenship, but if you're a dual citizen, you aren't automatically assessed taxes in both locations -- other factors come into play.

Re:Solution (1)

xaxa (988988) | 1 year,20 days | (#44685657)

As I just wrote above -- America is an exception when it comes to taxation of citizens living abroad: http://rt.com/usa/americans-refuse-citizenship-tax-317/ [rt.com]

(I meant "half" in the usual British sense, i.e. one parent is American.)

Re:Solution (0)

Anonymous Coward | 1 year,20 days | (#44686101)

I bet he meant Dual Citizen.

Re:Solution (1)

Gerzel (240421) | 1 year,20 days | (#44685221)

And start how many trade/real wars by breaking a multitude of treaties?

First (1, Insightful)

cookYourDog (3030961) | 1 year,20 days | (#44684991)

they came for the tea party. I didn't care because I wasn't in the tea party.

Re:First (1)

BrokenHalo (565198) | 1 year,20 days | (#44685325)

I don't even like tea. Now, Islay malt whisky on the other hand...

what this means (5, Informative)

jbolden (176878) | 1 year,20 days | (#44685001)

OK the article should have said what this means and didn't. The IRS reinstates 501c3 status pretty easily once you clean up your paperwork. You can apply for retroactive reinstatement but that requires a good explanation of why they didn't file, and if X.org's reason is some variant of "we forgot" that won't cut it. This means they are liable for corporate income taxes but I'm sure their expenses easily kill any income. The big problem is often state taxes apply during the period where they are off the 501c3 rolls. But here they might be able to do OK on an appeal.

My guess is that this is not going to be too expensive but it will be annoying.

Re:what this means (1)

BrokenHalo (565198) | 1 year,20 days | (#44685413)

The big problem is often state taxes apply during the period where they are off the 501c3 rolls. But here they might be able to do OK on an appeal.

I suppose that might depend on whether or not they actually made any profit. I have a suspicion that if they did, the tax in question might involve little more than a couple of people dropping a few days' coffee money on a counter.

They're not the only ones (2, Interesting)

Anonymous Coward | 1 year,20 days | (#44685027)

Tax-exempt status revoked for hundreds of area organizations [sj-r.com] (If you get a paywall you can get past by saving the site source to your hard drive and opening that up.

X.org forfeits agreement. IRS does job. News at 11 (3, Insightful)

OzPeter (195038) | 1 year,20 days | (#44685059)

So X.org applied for and received 501(c)3 status [wikipedia.org] , and then failed to live to its end of the bargain, resulting in the IRS revoking its status.

Someone please tell me why this really newsworthy? Is it only because its a company related to software? (Of which I bet the majority of /.ers don't even use - and I said majority .. not vocal individuals)

Re:X.org forfeits agreement. IRS does job. News at (2)

jbolden (176878) | 1 year,20 days | (#44685159)

X.org is the group writing X11. So, no I'd say a large chunk of /.ers if not a majority will use their software during any given decade.

Re:X.org forfeits agreement. IRS does job. News at (1)

Anonymous Coward | 1 year,20 days | (#44685203)

The only software that an absolute majority of /.ers use would probably be Windows and maybe Office. Does that mean that the only software company worth reporting on is Microsoft?

Re:X.org forfeits agreement. IRS does job. News at (4, Informative)

jonsmirl (114798) | 1 year,20 days | (#44685295)

X.org is not a company. It is is a group of volunteers, either individuals or corporate employees begin donated by their employers. The group writes and maintains the Xserver which is in use on almost every Linux desktop and many embedded systems. This code is given away for free to benefit all who use Linux.

If that doesn't qualify as a 501(c)3 I don't know what would qualify. The group has no revenue, they rely on donations to function and everything they make is given away for free -- to anyone who asks with no restrictions other than some minor licensing terms. And the licensing terms are really minor, like give proper attribution to the authors of the code. The benefit from being a 501(c)3 does not accrue to X.org, the tax benefits goes to the companies donating to the organization since those donations are now tax deductible. Hopefully that means X.org will get more donations.

I do agree that a few companies seem to be abusing 501(c)3 and open source. Those companies are making captive open source projects which basically only benefit themselves. But that's more of a marketing gimmick than a tax avoidance one. The resources being given to the captive 501(c)3 were deductible to the parent corporation anyway. So if the IRS dissolves these captive 501(c)3s they aren't going to get any more revenue. They'll just move where the deductions are being taken.

Re:X.org forfeits agreement. IRS does job. News at (1)

Anonymous Coward | 1 year,20 days | (#44685377)

X.org is not a company. It is is a group of volunteers

You may want to look up the word company. Also, all they had to do to remain 501(c)3 was to apparently file their paperwork in a timely manner. It would seem that the IRS is more picky about this kind of thing that open source fans are.

Re:X.org forfeits agreement. IRS does job. News at (1)

Bill_the_Engineer (772575) | 1 year,20 days | (#44686607)

If that doesn't qualify as a 501(c)3 I don't know what would qualify.

I think you are misunderstanding what is going on here. X.org qualified as a 501(c)3 corporation. They lost the qualification because they didn't file the required income taxes. This is completely X.org's fault.

Re:X.org forfeits agreement. IRS does job. News at (1)

rtaylor (70602) | 1 year,20 days | (#44686991)

The group has no revenue, they rely on donations to function and everything they make is given away for free

Prove it. Show me the paperwork.

That is the core of the issue. X.org is required to submit proof of this belief on an annual basis to IRS. They didn't do that.

Re:X.org forfeits agreement. IRS does job. News at (0)

Anonymous Coward | 1 year,20 days | (#44685379)

Linux is best enjoyed in the terminal ;) (true story)

Re:X.org forfeits agreement. IRS does job. News at (0)

Anonymous Coward | 1 year,20 days | (#44685769)

Someone please tell me why this really newsworthy? Is it only because its a company related to software? (Of which I bet the majority of /.ers don't even use - and I said majority .. not vocal individuals)

It's newsworthy because if you donate to X.Org, you can no longer get a tax deduction out of it. So we should know they're no longer 501(c)3.

They don't want the status so they can avoid paying taxes. I would seriously doubt they're making any profits to be taxed. They want the status to encourage donations.

First they came for the Tea Party (1, Redundant)

Gothmolly (148874) | 1 year,20 days | (#44685075)

And I didn't say anything, because I'm a liberal.
But now they're going after Open Source ? Color me outraged. ...oh wait, it doesnt matter since I already sold my freedom for security

Fuck off (3, Informative)

Anonymous Coward | 1 year,20 days | (#44685079)

They didn't file their taxes. It has nothing to do with politics.

Re:Fuck off ( score:+9000, troll) (0, Funny)

Anonymous Coward | 1 year,20 days | (#44685125)

You've got to expect a little scrutiny from the taxman if you explicitly name your organization after a group that didn't like paying their lawful taxes.

Re:Fuck off ( score:+9000, troll) (1, Troll)

Bartles (1198017) | 1 year,20 days | (#44685281)

Spoken like a true fascist who doesn't care that lawful != just.

Re:Fuck off ( score:+9000, troll) (1, Insightful)

h4rr4r (612664) | 1 year,20 days | (#44685399)

What part of scrutiny is not lawful?

I want the IRS to investigate 501c organizations of all stripes, frankly many of them are likely frauds.

Re:Fuck off ( score:+9000, troll) (1, Troll)

Bartles (1198017) | 1 year,20 days | (#44685507)

My point went right over your head. Scrutiny can be both lawful and unjust. As can taxes, laws, and punishment for crimes. A fascist who supports the state does not understand this or is entirely willing to overlook this defect.

Re:Fuck off ( score:+9000, troll) (1)

h4rr4r (612664) | 1 year,20 days | (#44687275)

Not everyone who supports a state is a fascist.
Lots of things can be unjust but being asked to prove you are supposed to be exempt from taxation is not.

Re:Fuck off ( score:+9000, troll) (0)

Anonymous Coward | 1 year,20 days | (#44685463)

If you don't like the law, change the law.

Re:Fuck off (0)

Anonymous Coward | 1 year,20 days | (#44687225)

What the hell is "filing taxes"? Is it some southern North American ritual related to filing tax return documents?

Re:First they came for the Tea Party (2, Informative)

Mr. Slippery (47854) | 1 year,20 days | (#44686063)

First they came for the Tea Party

Except, really, they didn't. [salon.com] They "came for" -- i.e., put on their "be on the lookout" list -- several different classes of non-profits, including "Open Source", "Occupy", "Free Palestine", and "Tea Party" groups, all at the same time. No "first they came for" about it.

But since Tea Party groups were essentially created by Fox "News", you heard a hell of a lot about that. Not so much about Palestinian rights groups having the exact same problem.

X.org tea party front? (0)

Anonymous Coward | 1 year,20 days | (#44685093)

Does this mean the X.Org is really a Tea Party front?

I ask this because according to the Tea Partiers, Libertarians, and Fox News, those were the people the IRS was singling out for investigating their non-profit status.

Re:X.org tea party front? (0)

Anonymous Coward | 1 year,20 days | (#44685153)

No, it's a front for the Lemon Party. Everybody knows that.

Re:X.org tea party front? (-1)

Anonymous Coward | 1 year,20 days | (#44685189)

Lemon Party [lemonparty.org]

Re:X.org tea party front? (3, Insightful)

Americano (920576) | 1 year,20 days | (#44685861)

I ask this because according to the Tea Partiers, Libertarians, and Fox News, those were the people the IRS was singling out for investigating their non-profit status.

So, counselor, in your estimation - is the IRS Inspector General a Tea Party Libertarian employed by Fox News, as well?

Because the IG report [cnn.com] basically confirmed what you're trying to hand-wave away - that organizations were targeted for "special" processing which imposed unnecessary burdens on them - for no other reason than their name, or chosen policy positions (e.g., a focus on "government spending").

From the report:

WHAT TIGTA FOUND
The IRS used inappropriate criteria that identified for review Tea Party and other organizations applying for tax-exempt status based upon their names or policy positions instead of indications of potential political campaign intervention. Ineffective management:
1) allowed inappropriate criteria to be developed and stay in place for more than 18 months,
2) resulted in substantial delays in processing certain applications, and
3) allowed unnecessary information requests to be issued.

Although the processing of some applications with potential significant political campaign intervention was started soon after receipt, no work was completed on the majority of these applications for 13 months. This was due to delays in receiving assistance from the Exempt Organizations function Headquarters office. For the 296 total political campaign intervention applications TIGTA reviewed as of December 17, 2012, 108 had been approved, 28 were withdrawn by the applicant, none had been denied, and 160 were open from 206 to 1,138 calendar days (some for more than three years and crossing two election cycles). More than 20 months after the initial case was identified, processing the cases began in earnest. Many organizations received requests for additional information from the IRS that included unnecessary, burdensome questions (e.g., lists of past and future donors). The IRS later informed some organizations that they did not need to provide previously requested information. IRS officials stated that any donor information received in response to a request from its Determinations Unit was later destroyed.

The lesson? Sometimes, the government really *is* wrong when Fox News reports they did something wrong.

WOW (0)

Anonymous Coward | 1 year,20 days | (#44685135)

Maybe they thought that X.org was supporting the the Tea Party? I know I use it on my computer. :-)

NSA not happy. (-1)

Anonymous Coward | 1 year,20 days | (#44685195)

prolly didn't want to allow some obfuscated gov.monitoring code in the program,
so they're now being "looked after" very meticulous .
maybe time to move to some (non u.s.) nice island with azure colored water and agreeable climate
to do some coding ... (let the windows XP desktopw allpaper be your inspiration).

not worth it (1)

Skapare (16644) | 1 year,20 days | (#44685225)

I though text-exempt status also meant you didn't have to file all that paperwork once you had it. Lot of good it does to have tax-exempt status for a non-profit that makes no money, anyway.

Re:not worth it (0)

Anonymous Coward | 1 year,20 days | (#44685303)

No, tax-exempt means you don't pay any taxes but you make up for it by filing about fifty times as much paperwork.

Re:not worth it (4, Insightful)

bobbied (2522392) | 1 year,20 days | (#44685619)

I though text-exempt status also meant you didn't have to file all that paperwork once you had it. Lot of good it does to have tax-exempt status for a non-profit that makes no money, anyway.

First off... Non-Profit does not mean they don't make money, only that any money and assets they acquire do not belong to someone or a for profit entity. Non-Profits can and do make money, sell things and services at a profit, pay employees and all the same things other businesses do, but they cannot acquire cash and assets which end up owned by an individual or other for profit entity.

Second, the filing requirements for tax returns are not that involved for a 501c3. For most non-profits it amounts to filing out a form similar to a 1040Ez. The IRS generally wants to know where your money came from so they can cross reference donors deductions with receipts, at least in the general sense. I don't believe that a non-profit has to report who is giving to it, just how much they received. I also don't think that they would be required to pay taxes, only file the report.

The real problem here is that the organization that can't be bothered to file the yearly reports is likely going to be a problem for someone wanting to give money and take the tax deduction. If the organization doesn't supply a receipt a donor will be limited to $250 and if they cannot supply the IRS with the yearly return, I'm sure they won't be bothered to send out receipts either.

Seems that this organization doesn't really care about the money side of things. This is a shame, because the accounting is NOT that hard and the risks of not having proper controls in place is pretty big.

Hmmm (0)

Anonymous Coward | 1 year,20 days | (#44685245)

They must conservative. Give 'em hell Barry!

I smell Microsoft (0, Troll)

kurt555gs (309278) | 1 year,20 days | (#44685297)

This is the type of dirty trick their lobbyists would do.

Re:I smell Microsoft (1)

Anonymous Psychopath (18031) | 1 year,20 days | (#44685381)

This is the type of dirty trick their lobbyists would do.

I doubt Microsoft even knows X.org exists or what they do.

Re:I smell Microsoft (2, Funny)

Tr3vin (1220548) | 1 year,20 days | (#44685499)

Yes, Microsoft sent lobbyists to X.Org to prevent them from filing their paperwork on time.

Re:I smell Microsoft (0)

Anonymous Coward | 1 year,20 days | (#44685729)

I smell an idiot.

X.org is a religion! (0)

erroneus (253617) | 1 year,20 days | (#44685311)

Seems to me that it is a spiritual quest more than a software project. Let's decide what the spiritual focus is and file some paperwork forgetting this ridiculous tax crap.

But the NFL is Non-profit (5, Informative)

Terry Pearson (935552) | 1 year,20 days | (#44685513)

Meanwhile, no one has a problem with the National Football League being considered "non-profit" by IRS standards ( http://www.usatoday.com/story/sports/nfl/2013/05/29/nfl-sports-leagues-irs-tax-exemption/2370945/ [usatoday.com] ). I am not saying that X.org did not screw things up, but we certainly have some strange qualifications to benefit from non-profit status. X.org sounds like they had some trouble filing, but I am sympathetic to non-profits in general having difficulty filing. Oftentimes, they really are run by people who are passionate about their cause, but not necessarily familiar with the accounting standards needed to remain in good standing with the IRS. Compliance with reporting requirements can cost you a lot in accounting fees and time.

Re:But the NFL is Non-profit (0)

Anonymous Coward | 1 year,20 days | (#44685957)

If they're "passionate enough" about their cause to incorporate as a non-profit foundation and apply for tax exempt status, then they should be "passionate enough" about their cause to seek legal and accounting advice to ensure they are in compliance with the relevant laws to maintain their tax exempt status.

Compliance with reporting requirements can cost you a lot in accounting fees and time.

So? Compliance with driving laws cost me a lot in wasted time and tolls. That doesn't give me the right to simply ignore them and start turning the highway into a demolition derby.

Re:But the NFL is Non-profit (0)

Anonymous Coward | 1 year,20 days | (#44686585)

If you are passionate enough to organize, find someone passionate enough to keep your accounting/legal straight. At least to the point of someone that can make sure your accountant is decent.

What is the IRS supposed to do? Say "These are the rules, but you really mean well, so we won't apply them to you" but say to the NFL "you setup yourself to follow the rules, but you're probably not legit because you are a bunch of money-grubbers"

Re:But the NFL is Non-profit (1)

UnknowingFool (672806) | 1 year,20 days | (#44686767)

Oh I have a problem with it. My point of view is that those with money like the NFL can always find a way not to pay taxes. Corporations do it all the time. At the same time, politicians want to make you believe that any one trying to correct these disparities will come into town looking for your women and children for blood sacrifices.

While I don't think the IRS is a benign entity, their hands are tied in both cases. Tax-exempt organizations have to file on time. Even though the NFL might make billions a year, they do qualify for exempt status according to the laws Congress passed. As for the IRS "going after" open source, that wasn't remotely what it appeared to me. Open Source organizations were on a watch list. Most likely because the IRS just doesn't understand them. I mean non-profit organizations sometimes funded by huge corporations would raise some concerns with me about whether they were tax dodges if I didn't know anything about software. As such the IRS paid more attention to them. "Going after" implies there was some sort of campaign.

Re:But the NFL is Non-profit (-1, Troll)

GNUALMAFUERTE (697061) | 1 year,20 days | (#44686799)

At least the NFL doesn't harm anyone. Churches do, they harm society as a whole, and they are still tax-exempt, even when they break the rules and get involved in partisan politics.

Re:But the NFL is Non-profit (0)

Anonymous Coward | 1 year,20 days | (#44686993)

Yeah, we should get rid of all those churches, with their "feed the hungry, clothe the naked, uplift the poor" rhetoric.

They do nothing but harm.

Typical Freetard Behavior (-1)

Anonymous Coward | 1 year,20 days | (#44685651)

Wants everything for free and no responsibility. Pay your damned taxes! It's not that hard.

  And, no, bit coins don't work. You also can't torrent them.

same thing happend to an outdoors club I was in (1)

peter303 (12292) | 1 year,20 days | (#44685901)

It was not that IRS had any "hate" for this kind of activity. It was just a series of sloppy club treasers failed to file the necessary paperwork.

X.Org getting out of the X Window business? (1)

px2 (321882) | 1 year,20 days | (#44686005)

Hmm. X.Org must have seen the writing on the wall and decided to get out of the X Window business. I hadn't heard that they were driving Wayland project. Good exit strategy. Likewise Mesa.

xorg / their accountant at fault (1)

CosaNostra Pizza Inc (1299163) | 1 year,20 days | (#44686329)

I have to side with the IRS on this one. BTW, I'm a software developer

Of course, they go after Free Software (-1, Flamebait)

GNUALMAFUERTE (697061) | 1 year,20 days | (#44686775)

You are trying to spread free, good code around, useful to a lot of people? Trying to contribute your knowledge and work to the community? How dare you! We're going to tax you into oblivion.

If, on the other hand, you are in the business of spreading lies about nonexistant magical beings in the sky and lobbying to get even more conservative, retrograde politicians in order to prevent people from having abortions, marrying, or otherwise being happy and doing what they want with their lifes, sure! here's your friendly tax exempt status. Don't worry if you break the rules either, turns out we need a certain high ranking officer we haven't had in a while, and we we'll never hire again, so go on! keep fucking up society, that is certainly not taxed!

The world is a seriously fucked up place.

Re:Of course, they go after Free Software (0)

Anonymous Coward | 1 year,20 days | (#44687113)

Do you really think a tax examiner thinks like this? They don't understand open source software development, they understand tax code. They understand that X.org filed a document asking for non-profit status, and was granted that status. All they care about now is that the org files their taxes in a timely manner. At this point they could care less what the org is doing, all they want is a simple tax return.

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