Re: [gentoo-nfp] Motion: approve preparation costs for tax filings FY2016-FY2019

[alicef]

On 6/29/19 2:18 PM, Robin H. Johnson wrote:
> Usually I'd just put this on the agenda, but I wanted to ensure wide
> visibility. I think I've captured everything critical here, but there is
> a non-zero chance that I've gotten details wrong as I've very busy this
> week with family medical stuff and my desktop hardware also failed.
>
> TL;DR:
> Motion: The Trustees shall approve funds for the tax filing preparation
> costs, as specified by the first item of the RFP's Section 3 [1][3], for
> FY2016-FY2019 inclusive (4 periods). The initial sum for those costs is
> estimated at $6000USD.
>
> Motion specifics:
> - The quoted cost for tax filing preparation ONLY is $1500USD per fiscal
>    year prepared.
> - A further discount MAY be available later based on follow-up actions
>    (more years or other services rendered by Corporate Capital Inc. [2])
> - The quoted fee by Corporate Capital includes some auditing of the
>    books to ensure that the financial statements are correct enough to
>    accurately prepare the tax filings.
> - This quote does NOT include any of the following costs, which are
>    understood and accepted as ADDITIONAL costs that will become fully
>    known after the preparation service is rendered:
>    - IRS filing fees
>    - Taxes owing to the IRS [5]
>    - IRS late filing penalties [5]
>    - IRS late payment penalties [5]
>    - Interest on taxes owing [5]
>    - Any other payments to State of New Mexico
> - FY2019 closes 2019/06/30, and the books still need to be processed &
>    financial statements assembled.
>
> Background #1:
> The Financials Services RFP [1] was issued by the Foundation in
> December, and had multiple false starts and disappointed ends (primarily
> in the form of initial interest from CPAs that then stopped responding
> to the Foundation). However, the Foundation HAS found a CPA to undertake
> at least parts of the project: Corporate Capital Inc. [2].
>
> The CPA thus far has entered a dialogue with the IRS to verify the state
> of our filings to date, and the actions required of the Foundation by
> the IRS. This cost the Foundation $350USD thus far (see bug #687898).
>
> The initial results of that dialogue are:
> 1) that the Foundation is both simultaneously a for-profit corporation
>     to the IRS (due to missing filings), and a not-for-profit to the
>     Public Regulatory Commission of New Mexico (due to regular filings).
> 2) that the Foundation need to file taxes at least starting for fiscal
>     period FY2016 onwards, due to the income reported by third-parties
>     for that year.
> 3) The matters of the earlier fiscal periods require other planning &
>     approvals by the Foundation (covered in antarus' pitch in running for
>     the Foundation again this election). The CPA has outline a range of
>     options in that regard, but is blocked by completion of the initial
>     FY2016 onwards filings. This would cover the third section of RFP
>     Section 3.
>
> The CPA has also done a cursory review of the Financial Statements [4]
> as prepared by Robin H. Johnson (robbat2), and provisionally approved
> them as sufficient for preparation of tax filings. Some work is needed
> in missing sections, such as baseline estimation of in-kind donations.
>
> [1] https://archives.gentoo.org/gentoo-project/message/6f92491f28f15897e8e4fc392ef1b6ec
> [2] https://www.corporatecapitalinc.com/
> [3] RFP, Section 3: "First and foremost the Foundation wants to get in good
> standing with the IRS including paying any back–taxes and penalties
> necessary. This will include assistance filing form 990 (or related
> forms.)"
> [4] https://wiki.gentoo.org/wiki/Foundation:Financial_Reports
> [5] Based on the discussion with the CPAs, the Net Income estimates from
> the Financial Statements, and some free IRS tax-owning calculators, I
> have a more detailed estimate of the sums to pay to the IRS, rounded
> here to the nearest $100USD:
> FY2016 - $2400USD taxes, $600 in penalties & interest = $3k USD
> FY2017 - $1500USD taxes, $500 in penalties & interest = $2k USD
> FY2018 - $4000USD taxes, $300 in penalties & interest = $4.3k USD
> FY2019 - books not available yet. Filing deadline is 2019/09/15.
>
> Background #2:
> I had some direct inquiries as to the history of contacting the IRS &
> results of the earlier CPA searches. I'm deliberately omitting the
> personal names of the third parties here, because of privacy concerns.
> Much of this is a summary of prior IRC logs/motions.
>
> 2016/03:
> First public CPA RFP-like request.
> https://archives.gentoo.org/gentoo-user/message/2ef544c4d3541ed52d980ee71101c29b
> There are multiple initial email responses, however none of the email
> exchanges are sustained by the other parties.
>
> 2017/03:
> dabbott & robbat2 try to submit change of address & filing extension
> request to IRS, no responses ever received.
>
> 2016/05-2017/08:
> Foundation engages a volunteer CPA local & known to dabbott. IRS
> declines responses, and the volunteer CPA becomes unavailable later in
> the year for health reasons.
>
> 2016/08-2018/11:
> dabbott tries writing a letter to the IRS, and is told to file various Form
> 4506 variants.
>
> 2016/10-2016/11:
> dabbott files forms 4506-T: gets rejection notices.
>
> 2017/07-2017/09:
> prometheanfire files form 4506-A, gets a non-answer from the IRS.
>
> 2017/06-2017/08:
> robbat2 engages a local CPA at cost (see bugs with title "Accounting
> Services Invoice.*" to pay fees), who aids immensely in the financial
> statement preparation, and also has a draft financial statement & Form
> 990 for FY2005, as well as a brief dialogue with the IRS. The CPA also
> becomes professionally unavailable after 2017/10 for personal & business
> reasons. $1000USD total is spent on the CPA's services.
>
> 2017/06-2018/08:
> Large book-keeping project by robbat2, with significant data entry work
> by zlg, and some complex accounting questions answered by k_f as well as
> the previous CPA only a friendly basis only.
>

I'm for paying all the past tax.
I approve this motion.