Gentoo Archives: gentoo-nfp

From: "William L. Thomson Jr." <wlt@××××××××××××××××.com>
To: gentoo-nfp@l.g.o
Subject: Re: [gentoo-nfp] Tax return and accounting discrepancies
Date: Wed, 23 Mar 2011 21:11:07
Message-Id: 1300914649.12053.125.camel@wlt
In Reply to: Re: [gentoo-nfp] Tax return and accounting discrepancies by Matthew Summers
1 On Wed, 2011-03-23 at 20:40 +0000, Matthew Summers wrote:
2 >
3 > 5. The Gentoo Foundation has been and is in good standing with NM,
4 > having filed all necessary documents on time since I joined.
5
6 Where are the annual financial reports that are required to be filed
7 with New Mexico?
8
9 "All charitable organizations existing, operating or soliciting
10 contributions in the State of New Mexico must register with the New
11 Mexico Attorney General and must file annual financial reports."
12 http://www.tax.newmexico.gov/Businesses/How-Do-I/Pages/Start-Registera-Non-Profit.aspx
13
14 > 6. I live in the US.
15 > 7. The Gentoo Foundation has been completely transparent regarding
16 > finances since the recovery.
17
18 If that was the case, the information I seek would already be available
19 and I would not be bring this matter up at all.
20
21 >
22 > William,
23 >
24 > I appreciate your perspective regarding the Gentoo Foundation.
25 > Unfortunately, the main reason the Foundation has not achieved proper
26 > status with the IRS is directly due to the irresponsibility and/or
27 > negligence of the former (pre-2008) board of trustees.
28
29 Which should have been corrected permanently in 2008.
30
31 > I do not say this to be mean-spirited, please note. This irresponsibility is
32 > manifest in the fact that correct status with the IRS was not filed
33 > within 27 months of the start of the organization, which would be
34 > sometime in 2004. It is that simple.
35
36 So an organization can never re-file or start over? You can cease one
37 legal entity and start a new one at any time. If there were mistakes in
38 the, past, there are easy ways to correct moving forward.
39
40 > This has in fact been a huge obstacle to the development of the
41 > Foundation as a non-profit entity. I was not involved with Gentoo,
42 > except as a user, during that time. Now, you have made and continue to
43 > make many claims in your various statements regarding the Foundation,
44 > some are quite novel while others are rather unhelpful.
45
46 Well if others were doing their duties, I would not be commenting either
47 way ;)
48
49 > Its completely true that the Foundation is not what it could be. I
50 > perhaps recognize this more than others given that I work closely with
51 > non-profits on a daily basis and know what the world holds in store
52 > for a fully operational 501(c)(3) Gentoo Foundation.
53
54 As I pointed out back in 2008, 501c3 takes 5 years. Which is a 5yr
55 probation period, which you must be in 100% compliance, or you lose the
56 status retroactively.
57
58 > I understand your frustrations regarding action and/or inaction
59 > within the board, but you must realize that the Foundation is not a
60 > dictatorship. We, the board I mean, are working together towards the
61 > common goals of Gentoo, while taking on a rather large legal
62 > responsibility.
63
64 You really need to explain to me the role and duties of an entity I was
65 part of before you? :)
66
67 We got quite allot done in 2008. I am very displeased there was a motion
68 to amend the bylaws back in 2009, but they have not been updated to
69 reflect such. Which is not anything major to make happen.
70
71 > You make many valid points regarding the need for
72 > financial professionals, etc, and I can assure you that I have used my
73 > CPA for many things Gentoo, paid for out of my own pocket.
74
75 Thats great, but Gentoo's needs it own CPA that Gentoo pays for. Also
76 the foundation should reimburse you for any of those expenses.
77
78 > I am happy to do that for now, since paying an actual CPA to handle an
79 > organization like the Gentoo Foundation can cost in excess of $1200
80 > per month.
81
82 That is just silly speculation. No CPA in their right mind, give the
83 amount of revenue Gentoo deals with on an annual basis would ever charge
84 such on a monthly basis. I can't even see them charging $1200 for annual
85 compliance. Now in this situation, I can see it costing in excess of
86 that to hire someone to correct the mess.
87
88 > I think you may agree that the Foundation cannot afford
89 > this.
90
91 If the foundation loses its NPO status, it will be instantly bankrupt in
92 paying back taxes, fines, etc.
93
94 > The values you quote for income are skewed since Google paid us
95 > for previous years GSoC. The actual income of the Foundation on a
96 > yearly basis averages less than $12,000.
97
98 Exactly my point, if you look at the form with the IRS, its an ecard
99 that needs to be filed. This is not major stuff, and a CPA would not
100 spend much if any time on such.
101
102 I still do my own taxes for my business which I also own.
103
104 > Further, I have used my attorneys for various bits and the Foundation
105 > has been assisted by the SFLC on various issues.
106
107 Unless they are tax attorneys, thats moot in this discussion. Though we
108 had discussed the SFLC and other matters back in 08.
109
110 > As I see a few more emails from you coming down the line, I will
111 > address those now. You are stirring the pot, sir. Please refrain from
112 > this as it does no good. You are attempting to scare people by your
113 > statements and I will not stand for it. Its quite clear that you are
114 > misinformed regarding the status of the Gentoo Foundation with the
115 > IRS. We, due to what I mention above, never received non-profit or
116 > tax-exempt status. In fact, that has been very difficult, and it's
117 > something we have been working on for many months now.
118
119 You can see things however you like. If I am wrong, then I will easily
120 be dismissed as fud. However if I am correct.....
121
122 Do you have any facts to show me to prove otherwise? Do you have copies
123 of annual financial reports sent to New Mexico and the IRS? If they
124 exist why are they not published on g.o?
125
126 > The Foundation is in no real danger.
127
128 What proof do you have of this? If I called the IRS would they confirm
129 that?
130
131 > Yes, we will likely have some tax
132 > penalties to deal with, however the Foundation's income has been well
133 > below federal minimums, so those penalties will be low.
134
135 Um no, loss of exempt status is not small. Even the minimal amounts of
136 revenue over the years, taxes will then have to be paid on. Gentoo
137 immediately becomes a for profit entity and has to comply as such. Then
138 Gentoo has to expend time, money, and resources, to regain NPO status.
139 Much less dream and hope for 501c3 status/
140
141 > This is especially true if we are able to make a convincing case regarding why
142 > the Foundation did not observe the 27 month guideline in our 1023
143 > application.
144
145 What 27 months? 501c3 takes 5 years.... Which I pointed out by reference
146 IRS documents back in 2008.
147
148 > All of this is actually being dealt with by competent individuals,
149 > despite what you may believe. What was left by the old trustees was a
150 > mess that will take awhile longer to sort out, but have no fear we
151 > will sort it out.
152
153 Look if things were published as they should be, then I would believe
154 otherwise. If these things exist, why have they not been published?
155
156 Convince me with proof, make me a believer. Because anytime I look, I am
157 not seeing anything.
158
159 > Lastly, I am preparing a proposal for review by the other board
160 > members that will address much of what you are taking issue with, as I
161 > believe at this point its time to bring in some funded professional
162 > assistance. I would highly encourage you to review the logs of our
163 > past meetings as I think you will see that we are addressing most if
164 > not all of your concerns.
165
166 Again Gentoo should have hired a CPA back in 2008. I recall a post on
167 g.o in the news some time back about a CPA. Does Gentoo have a CPA right
168 now? If Gentoo does not have a CPA, why?
169
170 > Thank you very much for your interest in the Gentoo Foundation and its
171 > continued health.
172
173 I am a member of and have contributed to the Gentoo Foundation. Thus its
174 my right to speak up, or question such things. Like it or not ;)
175
176 --
177 William L. Thomson Jr.
178 Obsidian-Studios, Inc.
179 http://www.obsidian-studios.com