Wiki source code of IRS Ruling Documentation

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1 This page links to private letter rulings and other documentation of IRS determinations (from 2010 forward) relating to FLOSS organizations. Because private letter rulings are redacted, it is not possible to identify the applicants with certainty, but names of known or likely applicants are given where possible.
2
3 {{toc/}}
4
5 = Statements of IRS policy =
6
7 * The [[Internal Revenue Manual 7.20.1.4.1>>url:http://www.irs.gov/irm/part7/irm_07-020-001.html#d0e453]] (revised 2012-12-20) lists "Cases Reserved for EO Technical," i.e. applications that are automatically elevated to the national office for intensive review. Included in this list are "[a]pplications from organizations providing free open source software in which the provision of free software is central to the organization's exempt purpose."
8 * An IRS [["Be On the Lookout" (BOLO) list>>attach:November 2010 BOLO IRS0000001349-IRS0000001364.pdf]] dated to November 2010 identified categories of applications that first-line examiners should flag for further scrutiny. It lists "Open Source Software" (tab 5, line 2), saying "These organizations are requesting either 501(c)(3) or 501(c)(6) exemption in order to collaboratively develop new software. The members of these organizations are usually the for-profit business or for-profit support technicians of the software." Under "Disposition of Watch Issues," the listing states: "The[re] is no specific guidance at this point. If you see a case, elevate it to your manager."
9
10 = Applications denied by the IRS =
11
12 == Under 501(c)(3) ==
13
14 === Yorba Foundation (PLR 201505040) ===
15
16 * Exempt purpose: "to develop free and open source software that lets users easily work with photos, audio, and video modules in the [Linux desktop] software environment including a photo organizing tool, a programmer tool, an audio editing tool, and a video editing tool."
17 * [[Determination letter>>url:http://www.irs.gov/pub/irs-wd/201505040.pdf]]
18 * Applied: February 17, 2009
19 * Determination: May 22, 2014
20 * Rationale for denial:
21 ** Charitable purposes:
22 *** Commerciality/substantial non-exempt purpose: Publication of software under open source licenses that permit use of the software by any person, for any purpose, is a substantial nonexempt purposes.
23 *** Charitable class: Activities do not further a charitable purpose because the organization does not limit the beneficiaries of them to a "charitable class" such as the poor.
24 *** Charitable purpose (promoting the arts): Software for editing media does not "promote and develop the arts in a way that is recognized as furthering a charitable purpose" because the organization "do[es] not limit [its] distribution [to artists] and do[es] not know who uses the Tools much less if they use them for artistic purposes."
25 *** Public work: Software does not qualify as a public work, because the "erection of public works" as a charitable purpose has historically been limited to "facilit[ies] ordinarily provided to the community at public expense," and does not extend to "intangibles such as software." Even if it did, software is not a public work because:
26 **** "[S]oftware is not a facility" because: 1) "it is not a lake, park, or like any other public work described in [applicable revenue rulings]," 2) it "is intangible... [so] its perpetual existence and access by the public relies upon private persons hosting the code on private servers, and anyone may alter the Tools."
27 **** Software is "not something ordinarily constructed by public bodies for use by members of the public."
28 **** "A public work cannot be owned by private persons."
29 **** Open source software can be used by anyone "for nonpublic uses."
30 **** A public work must serve "a community" and "[w]e have not found any authority for the proposition that the world is a community within the meaning of ยง 501(c)(3)."
31 ** Educational
32 *** Merely maintaining source code, documentation, user guides, manuals, and wikis is not an educational purpose, because the organization does not "instruct or train people" or "provide any formal or informal instruction on how to use the tools or other open source software."
33 ** Scientific
34 *** Software development a type of activity incident to commercial operations: "The release of the Tools software's source code is akin to the release of a commercial product and the release of object code is just like the release of a commercial product, not like the publication of scientific research. Therefore your software development is not directed to benefiting the public."
35 * Other resources
36 ** Jim Nelson's [[blog post>>url:http://blogs.gnome.org/jnelson/2014/06/30/the-new-501c3-and-the-future-of-free-software-in-the-united-states/]] on the IRS denial
37
38 === PLR [[201303018>>url:http://www.irs.gov/pub/irs-wd/1303018.pdf]] ([[CASH Music?>>url:http://blog.cashmusic.org/post/38343237209/state-of-the-union-organization-501-c-3-status]]) ===
39
40 * Determination: October 19, 2012
41
42 === PLR [[201044016>>url:http://www.irs.gov/pub/irs-wd/1044016.pdf]] ([[Jumo?>>url:https://en.wikipedia.org/wiki/Jumo]]) ===
43
44 * Determination: August 10, 2010
45
46 === PLR [[201349022>>url:http://www.irs.gov/pub/irs-wd/1349022.pdf]] ([[OpenFOAM Foundation?>>url:http://www.openfoam.org/]]) ===
47
48 * Determination: September 10, 2013
49
50 === PLR [[201329021>>url:http://www.irs.gov/pub/irs-wd/1329021.pdf]] ([[OpenID Foundation?>>url:http://openid.net/foundation/]]) ===
51
52 * Determination: April 23, 2013
53
54 === PLR [[201345030>>url:http://www.irs.gov/pub/irs-wd/1345030.pdf]] ([[OpenSocial Foundation?>>url:http://opensocial.org/about-us/]]) ===
55
56 * Determination: August 7, 2013
57
58 === PLR [[201329026>>url:http://www.irs.gov/pub/irs-wd/1329026.pdf]] ([[Schedules Direct?>>url:http://www.schedulesdirect.org/]]) ===
59
60 * April 22, 2013
61
62 === PLR [[201405024>>url:http://www.irs.gov/pub/irs-wd/1405024.pdf]] (provider of Creative Commons-licensed educational materials) ===
63
64 * November 8, 2013
65
66 === PLR [[201340020>>url:http://www.irs.gov/pub/irs-wd/1340020.pdf]] (provider of partly-FLOSS publishing software for publications targeting underserved communities) ===
67
68 * July 10, 2013
69
70 === PLR [[201405022>>url:http://www.irs.gov/pub/irs-wd/1405022.pdf]] ===
71
72 * January 31, 2014
73 * Exempt purposes:
74 ** to provide internet technology "security expertise in creating and managing IT infrastructures for a broad range of organizations and companies that need advanced scalability and information security."
75 ** to enable freedom of expression by producing "citizen-media" campaigns and "protecting websites and services from government interference particularly in countries where governments attempt to shut-down websites, blogs, social media sites and other tools used for communication and education on the web.
76 ** "to provide independent bloggers and civil society organizations in democratizing countries with cyber-security."
77 * Rationale for denial:
78 ** Providing computer security services is a trade or business ordinarily carried on for profit, but the organization doesn't limit its services to 501(c)(3) orgs
79 ** Internet access is not a human and civil right secured by law, because the UN Universal Declaration of Human Rights is not a treaty or law
80 ** Promoting free speech by non-US citizens does not promote a fundamental freedom, because the US constitution only applies to US citizens, and the organization's may be illegal in other countries.
81
82 === PLR [[201505041>>url:http://www.irs.gov/pub/irs-wd/201505041.pdf]] ===
83
84 * November 6, 2014
85 * Exempt purposes: "to coordinate and promote the development, production, distribution, and use of Free and Open Source Software useful for recording, converting, and playing audio and video."
86
87 === [[Internet Systems Consortium, Inc.>>url:http://wiki.opensource.org/bin/download/Projects/IRS+Ruling+Documentation/den0755r%2DInternet%2DEngines.pdf]] ===
88
89 * Exempt purpose: "supporting the development of freely-available computer software programs which implement core protocols and standards."
90 * Determination: November 13, 2000
91 * Later approved after restructuring in 2004
92
93 == Under 501(c)(4) ==
94
95 === [[LEAP Encryption Access Project>>url:http://leap.se]] ===
96
97 * PLR [[201507025>>url:http://www.irs.gov/pub/irs-wd/201507025.pdf]]
98 * Determination: November 18, 2014
99
100 == Under 501(c)(6) ==
101
102 === PLR [[201420021>>url:http://www.irs.gov/pub/irs-wd/1420021.pdf]] ([[BigBlueButton Foundation?>>url:http://bigbluebutton.org/2010/07/12/bigbluebutton-foundation/]]) ===
103
104 === PLR [[201024066>>url:http://www.irs.gov/pub/irs-wd/1024066.pdf]] ([[Open Media Now Foundation?>>url:https://lists.gnu.org/archive/html/gnash-dev/2011-10/msg00054.html]]) ===
105
106 === OpenStack Foundation (PLR [[201347022>>url:http://lists.openstack.org/pipermail/tax-affairs/attachments/20140716/477faee1/attachment-0001.pdf]]) ===
107
108 = Applications approved by the IRS =
109
110 == Under 501(c)(3) ==
111
112
113 === Apereo Foundation ===
114
115 * Incorporated December 28, 2013
116 * Applied January 2014
117 * Approved September 2014
118
119 === Brave New Software Project, Inc. ===
120
121 * Originally [[denied>>attach:Brave-New-Software-501c3.pdf]] on May 16, 2012
122 * [[Protested>>attach:BNS-protest-final-signed.pdf]] June 28, 2012
123 * [[Approved>>attach:BNS-approved.pdf]] without further process on June 16, 2014
124
125 === Calyx Institute ===
126
127 * Applied August 2012
128 * Approved November 2014
129
130 (((
131 === (% style="line-height: 19.6000003814697px;" %)OpenMRS1, Limited (OpenMRS Inc.)(%%) ===
132
133 * (% style="line-height: 19.6000003814697px;" %)[[Applied>>attach:OpenMRS Form 1023 Submission.pdf]] May 24, 2012 as 509(a)(3) supporting organization
134 * (% style="line-height: 19.6000003814697px;" %)[[Approved>>attach:OpenMRS 501c3 Designation Letter.pdf]] March 7, 2014 as 509(a)(1) public charity
135
136 === Open Source Elections Technology (OSET) Foundation ===
137
138 * Applied (as Open Source Digital Voting Foundation) on April 21, 2007
139 * Approved on July 18, 2013
140
141 === Open Source Hardware Association ===
142
143 * Applied July 27, 2013
144 * Approved September 3, 2014
145
146 === Open Source Robotics Foundation ===
147
148 * Incorporated March 2012
149 * Applied March 2013
150 * Approved June 2014
151
152 === Sahana Software Foundation ===
153
154 * Applied July 1, 2009
155 * Approved January 5, 2012
156
157 === Sarapis Foundation ===
158
159 * Applied July 2014
160 * Approved September 2014
161
162 === X.org Foundation ===
163
164 * Approved May 17, 2012
165 )))
166
167 == Under 501(c)(4) ==
168
169 === Open Source Geospatial Foundation ===
170
171 * Converted 501(c)(3) application to 501(c)(4) application
172 * [[Approved>>url:http://svn.osgeo.org/osgeo/board/irs_docs/OSGeo-Determination_Letters_c3andc4-20130909.pdf]] September 9, 2013
173 * [[Letter>>url:http://www.osgeo.org/node/1380]] from OSGeo's attorney David Atkin explaining that the IRS would only approve the 501(c)(3) application if OSGeo revised its proposed activities to exclude all but educational activities.
174
175 == Under 501(c)(6) ==
176
177 === OpenID Foundation ===
178
179 * Board [[approved>>url:http://lists.openid.net/pipermail/openid-board/2013-March/005350.html]] transition from 501(c)(3) application to 501(c)(6) application on February 27, 2013

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