[gentoo-dev] Re: Paid support

["Duncan" <1i5t5.duncan@cox.net>]

Donnie Berkholz <dberkholz@gentoo.org> posted 4502320A.2070402@gentoo.org,
excerpted below, on  Fri, 08 Sep 2006 20:16:26 -0700:

> Curtis Napier wrote:
>> Giving ad space to our sponsors is legal for us to do as a Not For
>> Profit because they are donating goods and/or services to us.
>> Technically we are not giving them "ads", we are acknowledging the
>> donated goods and/or services. Just like PBS does at the beginning of
>> it's shows, they aren't ads but acknowledgments of donations.
>> 
>> Basically I just want to make sure that we are not breaking any of the
>> rules of being a Not For Profit foundation. The IRS doesn't accept "We
>> didn't know any better" as an excuse when they come knocking on our door
>> to re-evaluate our Not For Profit status because we are giving free
>> advertising to people who *ARE* being paid in a For Profit manner.
> 
> You just made my point. THEY are being paid, not Gentoo. Gentoo receives
> no financial support from this, and Gentoo is not offering goods or
> services in return for money.

I see (and appreciate) his point tho.  As you say, we /should/ be in the
clear.  However, if we use the wrong language on the paid support setup
page, then the IRS /could/ find that the corporations are hiring Gentoo
developers in a quid-pro-quo of some sort, and that the Gentoo NFP is only
an attempt at an illegal tax shelter arrangement whereby Gentoo is just a
convenient way to arrange to pay someone more without them having to pay
taxes on it.

Consider this scenario.  A company donates some equipment thru the
adopt-a-dev program, that ends up in the possession of someone they end up
contracting thru the paid support program as well.  Depending on how it's
arranged, the sequence and timing, etc, it could look like the equipment
donation was payment in kind in ordered to hide the real value paid to
that developer, thus lowering his taxes.  It could appear to be a tax
dodge.

As long as we get it right, no problem, but when the risk is loss of NFP
status and back taxes plus fines for non-payment, plus possible criminal
charges...  Let's just say it's in everyone's interest to get it right the
first time around!  It might cost a few hundred to get a professional
opinion on paper, but come an audit a couple years down the road, that
paper could save our ass!

-- 
Duncan - List replies preferred.   No HTML msgs.
"Every nonfree program has a lord, a master --
and if you use the program, he is your master."  Richard Stallman

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