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<div class="moz-cite-prefix">Steve,<br>
I'm impressed with your advise, and would be keen to see your
guidance put into practice for FOSS4G 2014, if possible. It seems
very plausible that FOSS4G could save a significant tax bill if
your advice is followed, and it would be worth our while paying an
accountant to investigate this further.<br>
<br>
Steve,<br>
Would you be prepared to continue advising OSGeo/FOSS4G with what
you know, until such time as a contract is put in place?<br>
<br>
Washington / Portland proposals,<br>
If you were to be selected, would you be prepared to support Steve
in his investigations and help gain tax exempt status for the
FOSS4G event, determine if it is possible, and then put it into
place if it is economical to do so?<br>
<br>
On 15/07/2013 2:56 AM, Robert Cheetham wrote:<br>
</div>
<blockquote
cite="mid:CAGEj39ming=OsD2QAgoWjmbdZH6vk09Dbioq8oBxwp6ZfS26Yg@mail.gmail.com"
type="cite">
<div dir="ltr">Steve,
<div><br>
</div>
<div>I was not part of the list through the entire conversation,
and I think I might have missed the part about holding the
funds in a trust account for use by another non-profit in the
future. In this scenario, I agree that if the funds are never
disbursed to OSGeo, then one could be potentially avoid taxes,
provided that OSGeo does not have control of the funds and
they are turned over to another non-profit to manage the next
event. This is a subtlety, however, that one would need to
discuss with an accountant to make sure it would pass muster.</div>
<div><br>
</div>
<div>Robert</div>
<div><br>
</div>
</div>
<div class="gmail_extra"><br clear="all">
<div>
<div dir="ltr"><span></span><span></span><br>
------------------<br>
Robert Cheetham
<div><br>
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<div class="gmail_quote">On Sun, Jul 14, 2013 at 10:02 AM, Steve
Swazee <span dir="ltr"><<a moz-do-not-send="true"
href="mailto:sdswazee@sharedgeo.org" target="_blank">sdswazee@sharedgeo.org</a>></span>
wrote:<br>
<blockquote class="gmail_quote" style="margin:0 0 0
.8ex;border-left:1px #ccc solid;padding-left:1ex">
"Advice that costs you nothing, is worth exactly what you
paid for it." So<br>
goes the saying. With that thought in mind - my comments
below:<br>
<br>
Like Robert, I do not claim to be a tax expert. However, I
do claim to be a<br>
thorough and meticulous reader of nonprofit tax code.
Enough so that I was<br>
able to have in hand an IRS tax exempt letter for SharedGeo
in a little over<br>
two weeks after I filed the paperwork in 2009. If you check
around, you'll<br>
find out that's pretty much an unheard time frame (however,
I will admit, it<br>
could have been "luck").<br>
<br>
Anyway, as previously offered, in the FOSS4G-NA 2013
contract between<br>
SharedGeo and OSGeo I wrote in a "project" clause which I
believe would have<br>
done at least two things if it had been activated (here are
some related<br>
links about nonprofit projects/fiscal sponsorship -<br>
<a moz-do-not-send="true"
href="http://charitylawyerblog.com/2010/09/17/fiscal-sponsorship-vs-fiscal-agency/"
target="_blank">http://charitylawyerblog.com/2010/09/17/fiscal-sponsorship-vs-fiscal-agency/</a><br>
, <a moz-do-not-send="true"
href="http://en.wikipedia.org/wiki/Fiscal_sponsorship"
target="_blank">http://en.wikipedia.org/wiki/Fiscal_sponsorship</a>):<br>
<br>
1.) As accurately described by Robert below, it would have
allowed "donors"<br>
to write off "contributions". However, sales tax is a state
function, so<br>
taxable items would have been exempt only to the extent
SharedGeo was exempt<br>
from Minnesota State sales tax, which it is.<br>
2.) More importantly, entering "project" status would have
allowed all or<br>
some of the FOSS4G-NA 2013 event profits to be held in a
FOSS4G-NA project<br>
"trust" account (without tax to OSGeo) to support the next
FOSS4G-NA event.<br>
For example, the SharedGeo "Project Manager" - David Bitner
- could have<br>
served as the fund custodian until that time when the funds
were needed for<br>
startup of FOSS4G-NA 2015, or OSGeo achieved tax exempt
status - at which<br>
time a nonprofit to nonprofit transfer could be executed.
Alternately, some<br>
or all of the funds potentially could have been "metered"
out of the account<br>
back to OSGeo in a way that would have reduced tax impact of
the inflow<br>
(e.g. we don't need the money right now, leave it there).<br>
<br>
Consequently, I take exception to the thought that there was
no way to<br>
shelter FOSS4G-NA profit from taxes. This issue did not
bubble to the top<br>
in 2012 because the profit was small and it is my
understanding that event<br>
facilitation was principally by OpenGeo vs. OSGeo. However,
the 50K from<br>
2013 is the harbinger of what's coming and as long as OSGeo
does not enjoy<br>
nonprofit status (I believe the 3rd filing is underway), I
would suggest<br>
that tax planning needs to dialed into the calculus for
these events. And<br>
as demonstrated with the previously offered Washington and
Portland<br>
examples, it's a point that expands nearly exponentially as
event profits go<br>
up.<br>
<br>
Bottom line - in my opinion, OSGeo failing to have executed
on that<br>
"project" entry clause for Minneapolis unfortunately leaves
SharedGeo with<br>
no option on contract close out. As accurately related
below - ALL funds<br>
MUST now be assigned to OSGeo as taxable income. Living in
a state with a<br>
bunch of tight fisted Scandinavians - that makes me sad. I
watched the<br>
Minneapolis LOC slaving away to save dimes, only to now
needlessly turn over<br>
dollars to the tax man.<br>
<br>
At least that is how I see the situation...FWIW.<br>
<br>
Cheers,<br>
Steve<br>
<br>
<br>
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Today's Topics:<br>
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1. Re: Tax Implications of FOSS4G (Robert Cheetham)<br>
<br>
<br>
----------------------------------------------------------------------<br>
<br>
Message: 1<br>
Date: Fri, 12 Jul 2013 18:15:15 -0400<br>
From: Robert Cheetham <<a moz-do-not-send="true"
href="mailto:cheetham@azavea.com">cheetham@azavea.com</a>><br>
To: Dave McIlhagga <<a moz-do-not-send="true"
href="mailto:dmcilhagga@dmsolutions.ca">dmcilhagga@dmsolutions.ca</a>><br>
Cc: <a moz-do-not-send="true"
href="mailto:conference_dev@lists.osgeo.org">conference_dev@lists.osgeo.org</a><br>
Subject: Re: [OSGeo-Conf] Tax Implications of FOSS4G<br>
Message-ID:<br>
<CAGEj39nQEYa-aCJBB0woP-FUn=<a
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Content-Type: text/plain; charset="iso-8859-1"<br>
<br>
I am not a tax expert, but Azavea has worked with many
non-profits and<br>
foundations over the years, including arrangements in which
the non-profit<br>
is serving as a fiscal agent on a given project. If OSGeo
is not a<br>
non-profit, there is no way for another non-profit to extend
its status to<br>
prevent payment of taxes by OSGeo. I don't think Eclipse's
status would be<br>
any different from Stumptown Syndicate or any other
non-profit in this<br>
respect.<br>
<br>
The "extension of non-profit status" for the purposes of the
event (the<br>
reference in the SharedGeo contract) would mean that the
event could be<br>
operated without paying sales tax and any donations made to
the event would<br>
be treated as donations to a non-profit organization (which
would mean that<br>
they might be tax-deductible for the donor). However, once
the proceeds are<br>
transferred from the event organizer (the non-profit) to a
for-profit entity<br>
(OSGeo), that for-profit entity would be liable for the tax
liability<br>
related to this income, and it would be treated in the same
manner as any<br>
other income it might receive.<br>
<br>
Best,<br>
<br>
Robert<br>
<br>
<br>
<br>
------------------<br>
Robert Cheetham<br>
<br>
Azavea | 340 N 12th St, Ste 402, Philadelphia, PA <a
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On Fri, Jul 12, 2013 at 10:09 AM, Dave McIlhagga<br>
<<a moz-do-not-send="true"
href="mailto:dmcilhagga@dmsolutions.ca">dmcilhagga@dmsolutions.ca</a>>wrote:<br>
<br>
> One would need a US Tax expert to weigh in to know the
definitive<br>
> answer<br>
> -- but intuitively, it would seem impossible for a
taxable<br>
> organization to take in revenue that results in profit
for the<br>
organization as a whole.<br>
><br>
> If there's another way - I'd suggest that's something
OSGeo would need<br>
> to get it's own tax advice on, and establish as a basis
for future events.<br>
> Otherwise, we're all just dealing with hearsay.<br>
><br>
> Dave<br>
><br>
><br>
><br>
> On 2013-07-12, at 10:03 AM, Jeroen Ticheler<br>
> <<a moz-do-not-send="true"
href="mailto:jeroen.ticheler@geocat.net">jeroen.ticheler@geocat.net</a>><br>
> wrote:<br>
><br>
> Hi Kate,<br>
> Thanks! But what is the meaning of "extending the tax
exempt status"<br>
> of e.g. the Eclipse Foundation? From your comment below
this "umbrella<br>
> capability" becomes an empty shell if OSGeo in the end
still requires<br>
> the tax payment on income.<br>
> Thanks,<br>
> Jeroen<br>
><br>
> On 12 jul. 2013, at 15:56, Kate Chapman <<a
moz-do-not-send="true" href="mailto:kate@maploser.com">kate@maploser.com</a>>
wrote:<br>
><br>
> Hi Jeroen,<br>
><br>
> Once a payment is made to OSGEO it would be income for
the organization.<br>
> If perhaps OSGEO were to not get approved for tax
exempt status in the<br>
> US they would then owe tax on it as income.<br>
><br>
> Kate<br>
><br>
><br>
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