Gentoo Archives: gentoo-nfp

From: "Robin H. Johnson" <robbat2@g.o>
To: gentoo-nfp@l.g.o
Subject: [gentoo-nfp] Motion: approve preparation costs for tax filings FY2016-FY2019
Date: Sat, 29 Jun 2019 05:18:22
Message-Id: robbat2-20190629T033846-572954517Z@orbis-terrarum.net
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

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