Re: [gentoo-nfp] Motion: approve preparation costs for tax filings FY2016-FY2019

[Alec Warner <antarus@gentoo.org>]

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I join in approving.

-A

On Sun, Jun 30, 2019 at 3:45 PM Aaron Bauman <bman@gentoo.org> wrote:

> On Sat, Jun 29, 2019 at 05:18:13AM +0000, Robin H. Johnson wrote:
> > Usually I'd just put this on the agenda, but I wanted to ensure wide
> > visibility. I think I've captured everything critical here, but there is
> > a non-zero chance that I've gotten details wrong as I've very busy this
> > week with family medical stuff and my desktop hardware also failed.
> >
> > TL;DR:
> > Motion: The Trustees shall approve funds for the tax filing preparation
> > costs, as specified by the first item of the RFP's Section 3 [1][3], for
> > FY2016-FY2019 inclusive (4 periods). The initial sum for those costs is
> > estimated at $6000USD.
> >
> > Motion specifics:
> > - The quoted cost for tax filing preparation ONLY is $1500USD per fiscal
> >   year prepared.
> > - A further discount MAY be available later based on follow-up actions
> >   (more years or other services rendered by Corporate Capital Inc. [2])
> > - The quoted fee by Corporate Capital includes some auditing of the
> >   books to ensure that the financial statements are correct enough to
> >   accurately prepare the tax filings.
> > - This quote does NOT include any of the following costs, which are
> >   understood and accepted as ADDITIONAL costs that will become fully
> >   known after the preparation service is rendered:
> >   - IRS filing fees
> >   - Taxes owing to the IRS [5]
> >   - IRS late filing penalties [5]
> >   - IRS late payment penalties [5]
> >   - Interest on taxes owing [5]
> >   - Any other payments to State of New Mexico
> > - FY2019 closes 2019/06/30, and the books still need to be processed &
> >   financial statements assembled.
> >
> > Background #1:
> > The Financials Services RFP [1] was issued by the Foundation in
> > December, and had multiple false starts and disappointed ends (primarily
> > in the form of initial interest from CPAs that then stopped responding
> > to the Foundation). However, the Foundation HAS found a CPA to undertake
> > at least parts of the project: Corporate Capital Inc. [2].
> >
> > The CPA thus far has entered a dialogue with the IRS to verify the state
> > of our filings to date, and the actions required of the Foundation by
> > the IRS. This cost the Foundation $350USD thus far (see bug #687898).
> >
> > The initial results of that dialogue are:
> > 1) that the Foundation is both simultaneously a for-profit corporation
> >    to the IRS (due to missing filings), and a not-for-profit to the
> >    Public Regulatory Commission of New Mexico (due to regular filings).
> > 2) that the Foundation need to file taxes at least starting for fiscal
> >    period FY2016 onwards, due to the income reported by third-parties
> >    for that year.
> > 3) The matters of the earlier fiscal periods require other planning &
> >    approvals by the Foundation (covered in antarus' pitch in running for
> >    the Foundation again this election). The CPA has outline a range of
> >    options in that regard, but is blocked by completion of the initial
> >    FY2016 onwards filings. This would cover the third section of RFP
> >    Section 3.
> >
> > The CPA has also done a cursory review of the Financial Statements [4]
> > as prepared by Robin H. Johnson (robbat2), and provisionally approved
> > them as sufficient for preparation of tax filings. Some work is needed
> > in missing sections, such as baseline estimation of in-kind donations.
> >
> > [1]
> https://archives.gentoo.org/gentoo-project/message/6f92491f28f15897e8e4fc392ef1b6ec
> > [2] https://www.corporatecapitalinc.com/
> > [3] RFP, Section 3: "First and foremost the Foundation wants to get in
> good
> > standing with the IRS including paying any back–taxes and penalties
> > necessary. This will include assistance filing form 990 (or related
> > forms.)"
> > [4] https://wiki.gentoo.org/wiki/Foundation:Financial_Reports
> > [5] Based on the discussion with the CPAs, the Net Income estimates from
> > the Financial Statements, and some free IRS tax-owning calculators, I
> > have a more detailed estimate of the sums to pay to the IRS, rounded
> > here to the nearest $100USD:
> > FY2016 - $2400USD taxes, $600 in penalties & interest = $3k USD
> > FY2017 - $1500USD taxes, $500 in penalties & interest = $2k USD
> > FY2018 - $4000USD taxes, $300 in penalties & interest = $4.3k USD
> > FY2019 - books not available yet. Filing deadline is 2019/09/15.
> >
> > Background #2:
> > I had some direct inquiries as to the history of contacting the IRS &
> > results of the earlier CPA searches. I'm deliberately omitting the
> > personal names of the third parties here, because of privacy concerns.
> > Much of this is a summary of prior IRC logs/motions.
> >
> > 2016/03:
> > First public CPA RFP-like request.
> >
> https://archives.gentoo.org/gentoo-user/message/2ef544c4d3541ed52d980ee71101c29b
> > There are multiple initial email responses, however none of the email
> > exchanges are sustained by the other parties.
> >
> > 2017/03:
> > dabbott & robbat2 try to submit change of address & filing extension
> > request to IRS, no responses ever received.
> >
> > 2016/05-2017/08:
> > Foundation engages a volunteer CPA local & known to dabbott. IRS
> > declines responses, and the volunteer CPA becomes unavailable later in
> > the year for health reasons.
> >
> > 2016/08-2018/11:
> > dabbott tries writing a letter to the IRS, and is told to file various
> Form
> > 4506 variants.
> >
> > 2016/10-2016/11:
> > dabbott files forms 4506-T: gets rejection notices.
> >
> > 2017/07-2017/09:
> > prometheanfire files form 4506-A, gets a non-answer from the IRS.
> >
> > 2017/06-2017/08:
> > robbat2 engages a local CPA at cost (see bugs with title "Accounting
> > Services Invoice.*" to pay fees), who aids immensely in the financial
> > statement preparation, and also has a draft financial statement & Form
> > 990 for FY2005, as well as a brief dialogue with the IRS. The CPA also
> > becomes professionally unavailable after 2017/10 for personal & business
> > reasons. $1000USD total is spent on the CPA's services.
> >
> > 2017/06-2018/08:
> > Large book-keeping project by robbat2, with significant data entry work
> > by zlg, and some complex accounting questions answered by k_f as well as
> > the previous CPA only a friendly basis only.
> >
> > --
> > Robin Hugh Johnson
> > Gentoo Linux: Dev, Infra Lead, Foundation Treasurer
> > E-Mail   : robbat2@gentoo.org
> > GnuPG FP : 11ACBA4F 4778E3F6 E4EDF38E B27B944E 34884E85
> > GnuPG FP : 7D0B3CEB E9B85B1F 825BCECF EE05E6F6 A48F6136
>
> I approve this motion.
>
> --
> Cheers,
> Aaron
>

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