September 23, 2014

0x4E: IRS Refusal Redux

Summary

Bradley and Karen discuss the key differences between 501(c)(3) and 501(c)(6) organizations in the USA, and discuss recent refusals by the IRS to grant such statuses to Open Source and Free Software orgs.

This show was released on Tuesday 23 September 2014; its running time is 00:49:25.

Show Notes

Segment 0 (00:34)

• Bradley mentioned the 501(c)(3) vs. 501(c)(6) difference came up on FaiF 0x41. (03:35)
• Bradley mentioned that in 501(c)(3) status from the IRS is based on receiving some status governed by §170(b)(1)(A) of the tax code. (Most Free Software charities, such as Conservancy, are classifed as non-profit charities under §170(b)(1)(A)(vi).) (05:10)
• Bradley mentioned this issue had been discussed on FLOSS Foundations' mailing list (05:50)
• Bradley discussed that at the OSCON 2013 tutorial, Community Foundations 101, most of the 501(c)(6) representatives who spoke argued incorrectly that the differences between 501(c)(3)'s and 501(c)(6)'s were not substantive. (10:50)
• Karen referenced how the TV show Silicon Valley parodies the irony of for-profit software companies claiming they make the world a better place. (11:58)
• Bradley mentioned he was inspired by Michael Moore in his work on Free Software. (15:02)
• Bradley mentioned Karen's talk called Identity Crisis (15:21)
• Karen mentioned that open source was on the list of items the IRS gave additional scrutiny. (16:51)
• Bradley mentioned a blog post by Jim Nelson where Yorba's rejection was discussed; Yorba's 501(c)(3) application was previously discussed on was discussed on 0x1C, and covered in many other places. (17:46)
• Karen wrote a blog post about why she isn't worried for Conservancy's 501(c)(3) status at this time. (18:30)
• Bradley mentioned that IRS decisions don't make precedent, and if there's a dispute, it would go to USA Tax Court (19:00)
• Mozilla Foundation's odd hybrid for-profit/non-profit model was audited by the IRS, and Mozilla Foundation settled with the IRS. (20:22)
• Open Stack Foundation was initially denied 501(c)(6) status, as reported on Mark McLoughlin's blog. (25:10)
• Bradley promised links to both Yorba's 501(c)(3) denial letter from the IRS and Open Stack Foundation's 501(c)(6) denial letter from the IRS. (The response to the IRS from OpenStack, written by DLA Piper, OpenStack Foundation's law firm, is also available, too. (27:15)
• Bradley and Karen discussed Board of Directors meetings in FaiF 0x45: I'm Board (31:40)
• Bradley mentioned the How fresh stays fresh campaign, which includes the Nature's Pause Button television commercials by the American Frozen Food Institute, which is a 501(c)(6) organization. It's FY 2012 Form 990 is the most recent on available.
• Bradley also mentioned the Beef: It's What's For Dinner advertisting campaign that has existed for decades in the USA, which is sponsored by the National Cattlemen's Beef Association, Inc. which is a 501(c)(6) as well. It's FY 2012 Form 990 is the most recent on available.
(35:40)
• Bradley further mentioned the Pork: the other white meat advertising campaign, which has also existed for decades but is now called the Pork: Be Inspired campaign, seems a bit more dubious in its non-profit existence. It appears to be funded by the National Pork Board Foundation, which is ostensibly a 501(c)(3) but has no assets, revnue nor expenses, and appears to be a front for an org called the America's Pork Producers / Pork Checkoff, which appears to be some quasi-govermental agency related to pork (in other words, it's pork for pork). More research would probably be needed to figure out better what's going on here with regard to non-profit status, but it seems that unlike the Beef ads, which are clearly funded by a 501(c)(6), this campaign is funded by a separate legislation, presumably unrelated to §501(c). There is, BTW, also, a 501(c)(5) called the National Pork Producers Council, which appears to be where the big money is (— not surprisingly — 501(c)(4)'s and 501(c)(5)'s often make 501(c)(6)'s and 501(c)(3)'s look tiny by comparison). (36:13)

Segment 1 (39:43)

Conservancy and OSI jointly announced a working group on IRS applications and denials. (40:49)

Tags: faif, non-profit, Form 1023

November 11, 2011

Episode 0x1C: Adam Dingle of Yorba

Summary

Karen interviews Adam Dingle of Yorba, and Bradley and Karen briefly discuss the interview.

This show was released on Friday 11 November 2011; its running time is 00:51:23.

Show Notes

Segment 0 (00:33)

• The interview is with Adam Dingle of Yorba.
(02:30)

Segment 1 (02:45)

• Yorba was founded in January 2009. (04:01)
• Yorba applied for 501(c)(3) status nearly two years ago and the application is still pending in the queue (the same delay queue we discussed in Episode 0x13. (28:30)
• Adam mentioned Yorba's donation page. (30:13)

Segment 2 (41:08)

• Karen mentioned that Yorba's response to the IRS should be published soon. (41:35)
• Bradley mentioned Cat Allman's Fundraising 101 talk from OSCON. (43:30)

Tags: faif, non-profit, Form 1023

July 5, 2011

Episode 0x13: Torts and 1023s

Summary

Karen and Bradley discuss the USAmerican legal system in regard to torts, and the current delays from the USA IRS on 501(c)(3) non-profit applications (i.e., Form 1023s).

This show was released on Tuesday 5 July 2011; its running time is 00:39:49.

Show Notes

Segment 0 (00:48)

• Billy Crook wrote in to make a good joke about 0x12 being the last episode available in other RSS feeds. (Don't forget the right RSS feed is at faif.us.)
• Karen calls tortes delicious pastries.
• Bradley saw a documentary called Hot Coffee, which discussed the idea of tort deform. (03:35, 05:45)
• Bradley mentioned that Karl Rove, George W. Bush's political operative, was involved in early tort “reform”. (06:54)
• Brendan Scott is a lawyer in Australia, who has published about GPL enforcement and writes a blog about legal issues related to Open Source and Free Software (11:58)

Segment 1 (12:50)

• Bradley talked about 501(c)(3) status and Form 1023s in his interview on FLOSS weekly. (13:50)
• Around 2010, applications for Free Software non-profits' 501(c)(3) status started to be delayed, according to independent evidence that Karen and Bradley have collected from the IRS and the community of non-profits. (16:20)
• Form 1023s are the applications you file with the IRS (17:15)
• As far as we know, no applications have been refused yet for a Free Software non-profit, but there seem to be extremely long delays. (18:40)
• Bradley mentioned a blog post from the Executive Director of CASH Music, where he talked about their Form 1023 being delayed. (19:10)
• Karen has confirmed with IRS agents that this process of applications does not impact existing non-profits currently. (21:00)
• Bradley pointed out that COBOL jobs are still very prevalent. Bradley even found a website dedicated only to COBOL jobs. (36:18)
• After we recorded, Simon Phipps posted a blog post quoting Bradley about the issue
.

Tags: faif, non-profit, tort, Form 1023