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

[Michael P. Gerlek]

I'll going to review this tonight.

I've also just talked to our general counsel here -- he's not knowledgeable about the intricacies of the c3-vs-c6 issue, but he has offered to put me in touch with the tech-friendly, pro-bono, non-profit-focused arm of one of the big law firms here in town.

More as it happens --

-mpg



On Oct 30, 2012, at 9:09 AM, Daniel Morissette <dmorissette at mapgears.com> wrote:

> 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
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