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On Sun, Jul 14, 2019 at 04:20:49PM -0400, Aaron Bauman wrote: |
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> > > > Question 1: |
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> > > > - Should the Foundation do voluntary OPTIONAL backfiling to the IRS? |
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> > > > Yes, No |
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> My personal ethics don't really matter. If the IRS requires the additional 6 to |
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> gain exemption then they do. If not, then they don't. |
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> |
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> My *personal* experience tells me that they will require the additional 6 years. |
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So you'll gamble on it and wait for them to ask. |
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|
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> > > > - Remain a for-profit entity |
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> > > "remaining" a for-profit entity is antithetical to the original intent and |
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> > > purpose of the foundation. While there were failures of individuals to file the |
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> > > appropriate federal tax paperwork to gain tax-exemption status, this does not |
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> > > change how we should proceed nor set a precedent for "remaining" a in a |
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> > > for-profit status. |
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> > It's entirely possible to exist as a legal for-profit entity, but |
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> > operate entirely under non-profit principles, with the caveat that |
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> > you're being "good" and paying tax even when you could be exempt, and |
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> > that any donations you receive are entirely voluntary and the donors |
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> > cannot claim charitable contributions for them (I expect somebody might |
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> > accuse me of being a socialist with this description). |
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> > |
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> Why would we do that? |
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I gather that it's very uncommon amongst the US business models, but I |
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have encountered it elsewhere. It was behind some of the founding |
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principles for Certified B Corporations, that I'd summarize as "Do good |
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without being forced to do so" by law. |
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|
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> > Article III of Incorporation: |
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> > "The Corporation is organized and at all times shall be operated, on a |
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> > non-profit basis ..." |
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> > |
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> > > The 501c6 idea justs needs to go away. |
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> > The charitable donations only really apply for tax residents of the USA. |
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> > Very few countries permit cross-border charitable donations like this |
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> > (Canada for example permits it only if you earn a US income or the |
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> > recipient is certain universities). |
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> So, the justification to choose identify as a business league is based on |
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> residence of members? I don't see the logic and it doesn't change that a 501c6 |
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> does not fit our purpose. |
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You propose that we take additional restrictions of what we can do just |
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so that we might increase US donations due to them being charitable? |
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|
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> > For the FY2019 that just closed, as a quick analysis, our paypal gross |
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> > donations is approximately USD 15400.00. Of that, at least USD 9000 came |
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> > from non-US sources. |
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> > |
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> > Lobbying is a broad definition: encouraging usage of Gentoo can be |
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> > construed as Lobbying. |
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> > |
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> > At a broader level in IRS definitions: |
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> > 501(c)(3) |
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> > Operated exclusively for charitable, educational, religious, literary, |
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> > or scientific purposes |
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> > 501(c)(6) |
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> > Operated to promote a common business interest, and to improve business |
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> > conditions in the industry |
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> > |
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> > Is Gentoo Linux a: |
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> > - charitable purpose: no |
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> > - educational purpose: no |
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> Educational, yes. If you want examples then look at the public filings of SPI, |
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> SFC, etc. |
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> > - religious purpose: no |
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> > - literary purpose: no |
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> > - scientific purpose: no |
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> Scientific, yes. c.f. public filings of said companies above for an example |
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What filings are you referring to? Please do also note that each of |
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these 'purpose' types have specific definitions to the IRS. |
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|
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Neither Scientific nor Education appear in the PURPOSE of the SFC's |
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bylaws (which are articles of incorporation as well): |
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https://sfconservancy.org/docs/conservancy_by-laws.pdf |
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|
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The SPI's bylaws only mention Education halfway down their PURPOSE, and |
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in an oblique way: |
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https://www.spi-inc.org/corporate/by-laws/ |
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"to provide information and education regarding the proper use of the |
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Internet;" |
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|
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> > - common business interest: YES |
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> > |
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> No... see [1]. |
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Promoting the use of Gentoo Linux as a common business interest between |
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the members. |
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|
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The Linux Foundation 501(c)(6) PURPOSE on the other hand: |
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https://www.linuxfoundation.org/bylaws/ |
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"The purposes of this corporation include promoting, protecting, and |
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standardizing Linux and open source software." |
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|
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Gentoo's existing stated PURPOSE in the Articles of Incorporation, for |
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reference: |
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"The Corporation is organized and at all times shall be operated, on a |
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non-profit basis exclusive far the advancement and education and |
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promotion of software development in an open environment." (including |
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the spelling error). |
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|
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> > > I am not sure why we would even consider dissolving the foundation with a |
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> > > follow-on action of donating the money elsewhere. While I support donations to |
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> > > similar non-profits, the money currently held by the foundation was raised under |
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> > > the premise of supporting Gentoo. |
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> > Raised under that premise is different from being restricted to that |
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> > purpose by law. We have no donor-restricted funds as recognized by the |
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> > IRS [1]. I can speak canonically on that, as the Treasurer, and required |
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> > to keep track of any fund restrictions. |
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> You are correct, but my point was that donating those funds outside of Gentoo |
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> goes against the purpose of why they were raised. This is not a law |
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> interpretation or problem, it is a problem of raising money *for* Gentoo and |
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> then donating it elsewhere. |
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I'd donate it to an umbrella and place a donor-restriction on it, |
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telling them to promote Gentoo things with it ;-). |
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|
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> |
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> > > The dissolution proposal needs to come from the Trustees and be: |
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> > > |
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> > > 1. direct with purpose (e.g. we will go under an umbrella) |
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> > > 2. a well laid out plan to inform the membership of where |
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> > > assets/trademarks/monies will go |
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> > > |
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> > > Asking the general membership to support a dissolution with multiple endstates |
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> > > is not proper or responsible. |
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> > The two questions can be reformulated: |
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> > - do you support the dissolution of the Foundation |
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> > - NO => fix existing entity |
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> > - YES => see next question |
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> > - what should the outcome of the assets be? (new |
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> > nonprofit, umbrella, donation to nonprofit) |
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> The electorate needs to decide on fixed actions based on the proposal from the |
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> board. Otherwise, we will never reach a decision due to the disparity in the |
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> questions. |
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We're going to agree to disagree here then. In that case we can hold off |
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on the explicit support until we have an absolute plan that will work |
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(the result of the ranked choice). |
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|
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> > The CPA is not a book-keeper. We have retained the CPA for tax |
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> > preparation services ONLY. |
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> > |
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> > We could pay to retain book-keeping services (>$200/month), keep trying |
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> > to do it ourselves, or it would be done by the Umbrella. |
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> Wait, so the Certified Public Accountant doesn't do book keeping? Or are you |
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> simply trying to state that we only paid them to file tax paperwork? |
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> |
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> If the latter then great... if the former then you should revisit what a CPA is |
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> in the United States. |
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Exactly what I said before: "We have retained the CPA for tax |
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preparation services ONLY". My statement before that, "The CPA is not a |
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book-keeper" could have been worded in more detail "The CPA is not _our_ |
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book-keeper." |
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|
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The quote that the CPA provided, of $1500/year, does not include |
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any book-keeping at all. The book-keeping they would provide would not |
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be in open formats keeping with our social contract. |
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|
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The CPA did review the financial statements I prepared, and beyond due |
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diligence requests to verify numbers (the trustee email you've seen |
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asking for copies of specific bank statements and reconciliation |
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records), they are being used to prepare filings. |
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|
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If the foundation were to retain book-keeping services, I'd want it to |
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be kept in open formats per the social contract, and try to find |
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somewhere cheaper to do it (possibly excess capacity from the SFC's new |
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book-keeper, who is also not a CPA). |
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|
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> I will ping the CPA to find out an estimate for retaining CorpCap for all |
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> services. |
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They'll probably decline until they see more of the paypal transaction |
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data, and even then we aren't going to get something in open formats. |
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|
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-- |
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Robin Hugh Johnson |
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Gentoo Linux: Dev, Infra Lead, Foundation Treasurer |
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E-Mail : robbat2@g.o |
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GnuPG FP : 11ACBA4F 4778E3F6 E4EDF38E B27B944E 34884E85 |
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GnuPG FP : 7D0B3CEB E9B85B1F 825BCECF EE05E6F6 A48F6136 |