1 |
Usually I'd just put this on the agenda, but I wanted to ensure wide |
2 |
visibility. I think I've captured everything critical here, but there is |
3 |
a non-zero chance that I've gotten details wrong as I've very busy this |
4 |
week with family medical stuff and my desktop hardware also failed. |
5 |
|
6 |
TL;DR: |
7 |
Motion: The Trustees shall approve funds for the tax filing preparation |
8 |
costs, as specified by the first item of the RFP's Section 3 [1][3], for |
9 |
FY2016-FY2019 inclusive (4 periods). The initial sum for those costs is |
10 |
estimated at $6000USD. |
11 |
|
12 |
Motion specifics: |
13 |
- The quoted cost for tax filing preparation ONLY is $1500USD per fiscal |
14 |
year prepared. |
15 |
- A further discount MAY be available later based on follow-up actions |
16 |
(more years or other services rendered by Corporate Capital Inc. [2]) |
17 |
- The quoted fee by Corporate Capital includes some auditing of the |
18 |
books to ensure that the financial statements are correct enough to |
19 |
accurately prepare the tax filings. |
20 |
- This quote does NOT include any of the following costs, which are |
21 |
understood and accepted as ADDITIONAL costs that will become fully |
22 |
known after the preparation service is rendered: |
23 |
- IRS filing fees |
24 |
- Taxes owing to the IRS [5] |
25 |
- IRS late filing penalties [5] |
26 |
- IRS late payment penalties [5] |
27 |
- Interest on taxes owing [5] |
28 |
- Any other payments to State of New Mexico |
29 |
- FY2019 closes 2019/06/30, and the books still need to be processed & |
30 |
financial statements assembled. |
31 |
|
32 |
Background #1: |
33 |
The Financials Services RFP [1] was issued by the Foundation in |
34 |
December, and had multiple false starts and disappointed ends (primarily |
35 |
in the form of initial interest from CPAs that then stopped responding |
36 |
to the Foundation). However, the Foundation HAS found a CPA to undertake |
37 |
at least parts of the project: Corporate Capital Inc. [2]. |
38 |
|
39 |
The CPA thus far has entered a dialogue with the IRS to verify the state |
40 |
of our filings to date, and the actions required of the Foundation by |
41 |
the IRS. This cost the Foundation $350USD thus far (see bug #687898). |
42 |
|
43 |
The initial results of that dialogue are: |
44 |
1) that the Foundation is both simultaneously a for-profit corporation |
45 |
to the IRS (due to missing filings), and a not-for-profit to the |
46 |
Public Regulatory Commission of New Mexico (due to regular filings). |
47 |
2) that the Foundation need to file taxes at least starting for fiscal |
48 |
period FY2016 onwards, due to the income reported by third-parties |
49 |
for that year. |
50 |
3) The matters of the earlier fiscal periods require other planning & |
51 |
approvals by the Foundation (covered in antarus' pitch in running for |
52 |
the Foundation again this election). The CPA has outline a range of |
53 |
options in that regard, but is blocked by completion of the initial |
54 |
FY2016 onwards filings. This would cover the third section of RFP |
55 |
Section 3. |
56 |
|
57 |
The CPA has also done a cursory review of the Financial Statements [4] |
58 |
as prepared by Robin H. Johnson (robbat2), and provisionally approved |
59 |
them as sufficient for preparation of tax filings. Some work is needed |
60 |
in missing sections, such as baseline estimation of in-kind donations. |
61 |
|
62 |
[1] https://archives.gentoo.org/gentoo-project/message/6f92491f28f15897e8e4fc392ef1b6ec |
63 |
[2] https://www.corporatecapitalinc.com/ |
64 |
[3] RFP, Section 3: "First and foremost the Foundation wants to get in good |
65 |
standing with the IRS including paying any back–taxes and penalties |
66 |
necessary. This will include assistance filing form 990 (or related |
67 |
forms.)" |
68 |
[4] https://wiki.gentoo.org/wiki/Foundation:Financial_Reports |
69 |
[5] Based on the discussion with the CPAs, the Net Income estimates from |
70 |
the Financial Statements, and some free IRS tax-owning calculators, I |
71 |
have a more detailed estimate of the sums to pay to the IRS, rounded |
72 |
here to the nearest $100USD: |
73 |
FY2016 - $2400USD taxes, $600 in penalties & interest = $3k USD |
74 |
FY2017 - $1500USD taxes, $500 in penalties & interest = $2k USD |
75 |
FY2018 - $4000USD taxes, $300 in penalties & interest = $4.3k USD |
76 |
FY2019 - books not available yet. Filing deadline is 2019/09/15. |
77 |
|
78 |
Background #2: |
79 |
I had some direct inquiries as to the history of contacting the IRS & |
80 |
results of the earlier CPA searches. I'm deliberately omitting the |
81 |
personal names of the third parties here, because of privacy concerns. |
82 |
Much of this is a summary of prior IRC logs/motions. |
83 |
|
84 |
2016/03: |
85 |
First public CPA RFP-like request. |
86 |
https://archives.gentoo.org/gentoo-user/message/2ef544c4d3541ed52d980ee71101c29b |
87 |
There are multiple initial email responses, however none of the email |
88 |
exchanges are sustained by the other parties. |
89 |
|
90 |
2017/03: |
91 |
dabbott & robbat2 try to submit change of address & filing extension |
92 |
request to IRS, no responses ever received. |
93 |
|
94 |
2016/05-2017/08: |
95 |
Foundation engages a volunteer CPA local & known to dabbott. IRS |
96 |
declines responses, and the volunteer CPA becomes unavailable later in |
97 |
the year for health reasons. |
98 |
|
99 |
2016/08-2018/11: |
100 |
dabbott tries writing a letter to the IRS, and is told to file various Form |
101 |
4506 variants. |
102 |
|
103 |
2016/10-2016/11: |
104 |
dabbott files forms 4506-T: gets rejection notices. |
105 |
|
106 |
2017/07-2017/09: |
107 |
prometheanfire files form 4506-A, gets a non-answer from the IRS. |
108 |
|
109 |
2017/06-2017/08: |
110 |
robbat2 engages a local CPA at cost (see bugs with title "Accounting |
111 |
Services Invoice.*" to pay fees), who aids immensely in the financial |
112 |
statement preparation, and also has a draft financial statement & Form |
113 |
990 for FY2005, as well as a brief dialogue with the IRS. The CPA also |
114 |
becomes professionally unavailable after 2017/10 for personal & business |
115 |
reasons. $1000USD total is spent on the CPA's services. |
116 |
|
117 |
2017/06-2018/08: |
118 |
Large book-keeping project by robbat2, with significant data entry work |
119 |
by zlg, and some complex accounting questions answered by k_f as well as |
120 |
the previous CPA only a friendly basis only. |
121 |
|
122 |
-- |
123 |
Robin Hugh Johnson |
124 |
Gentoo Linux: Dev, Infra Lead, Foundation Treasurer |
125 |
E-Mail : robbat2@g.o |
126 |
GnuPG FP : 11ACBA4F 4778E3F6 E4EDF38E B27B944E 34884E85 |
127 |
GnuPG FP : 7D0B3CEB E9B85B1F 825BCECF EE05E6F6 A48F6136 |