[Board] Questions from IRS vs our 501(c)(3) status

[Daniel Morissette]

Board,

Earlier in September, we received some news from a new IRS agent about 
our application for 501(c)(3) status. The agent spoke to David Atkin, 
our attorney who worked on IRS stuff with Tyler in the past, and then we 
received a list of questions to answer from the IRS [1].

I also spoke to our attorney in the days that followed, and yesterday I 
received a written copy of his advice and suggestions, see [2].

To make a long story short, it seems that the IRS recognizes our 
educational mission and would be willing to grant 501(c)(3) status for 
our educational activities, but they do not consider that supporting 
software development qualifies by itself (unless it's solely for 
education), so things like the project sponsorship program would need to 
be moved to a for-profit subsidiary. There are also some bugs with the 
way some things are handled with respect to FOSS4G that would need 
adjustment.

To be honest I'm not too excited by the idea of a for-profit subsidiary 
and am not even sure if that would make any sense in our case (who would 
own it anyway?). In my first exchange with David I thought 
(misunderstood?) that it might have been the charitable aspect that was 
the problem and that going with 501(c)(6) as some people suggested in 
the past might do, but this is not what David's written notes (received 
yesterday) suggest.

I am planning a call tomorrow (Wednesday) with David's assistant to 
discuss our options. I would love to hear your feelings until then.

Perhaps we could setup a task force with a couple of US-based board 
members (or other members with experience) to work on our response which 
is due by mid-November (we requested and got an extension).

Daniel


[1] http://svn.osgeo.org/osgeo/board/irs_docs/OSGeo-IRS-Letter-20120914.pdf
[2] 
http://svn.osgeo.org/osgeo/board/irs_docs/OSGeo-IRS-attorney-advice-and-suggestions-20121029.pdf