On Wed, Jul 07, 2021 at 11:05:47AM -0700, Matt Turner wrote: > On Wed, Jul 7, 2021 at 7:26 AM Aaron Bauman wrote: > > > Are you instead interested in the Foundation moving from a 501(c)6 to > > > a 501(c)3 so that donations are tax deductible? If so, have you done > > > anything to work towards that? > > > > > > > We are not a 501(c)6 and never have been. We also have never been a > > 501(c)3 as the original board members never completed the paperwork. > > This is a pretty great example of the lack of communication I'm > talking about. Not just lack of communication. Horrible US law as well and people making assumptions about what a "valid" state is. > If we're not a 501(c)6 and never have been, then what are we and why > don't you just state that so we're all on the same page? Your statement misses some things: A) If we aren't a 501(c)(6), what are we? B) What set of rules are we required to operated under? C) What set of rules are we actually operating under? Part A was one of the significant questions we asked the CPA based on the accounting services RFP. And I'm not going to spoil this section with a TL;DR answer, because I want people to READ the section. The earliest trustees were intending to file paperwork to become a *501(c)(6)*, but never completed the paperwork. To the best of my research, there was no paperwork attempted by the earliest trustees towards a 501(c)(3). What follows is my IANAL & IANA(CPA) summary of the IRS "Life Cycle of a Business League (Trade Association)" https://www.irs.gov/charities-non-profits/other-non-profits/life-cycle-of-a-business-league-trade-association A *new* corporation can come into existence (based on filing articles of incorporation), and state it's INTENT to become a recognized 501(c)(6) or 501(c)(3). At that point, in some documentation, it's referred to as an not-yet-recognized 501(c)(3/6). It does NOT have IRS Determination Letter yet. Some donors, grantors and others might not yet provide discounts for tax-exempt organizations. The organization cannot issue As a not-yet-recognized 501(c)(3/6): - "Starting Out": the entity must acts under the set of rules that would applicable to a 501(c)(3/6) - "Applying to the IRS": files to become a 501(c)(3/6) & waits for the IRS review If it doesn't file to become a 501(c)(6), then it's a normal corporation business in the eyes of the IRS for any filings that are due at that point. At the same time, it can be a non-profit corporation recognized by a US state, which is what we are: recognized by New Mexico as a domestic non-profit corporation. > According to [1] we seem to be a 501(c)1. > [1] https://wiki.gentoo.org/wiki/Foundation:Articles_of_Incorporation Just because the text "501(c)(1)" occurs in your search doesn't mean you read what that section says. https://wiki.gentoo.org/wiki/Foundation:Articles_of_Incorporation#Article_V_-_Restrictions TL;DR: It says unless we CANNOT do activities that a 501(c)(1) can. | Notwithstanding any other provision of these articles, the Corporation | shall not carry on any activities not permitted to be carried on by a | Corporation exempt from Federal income tax under section 501(c)(1) of | the internal Revenue Code of 1986 or the corresponding provision of any | future United States Internal Revenue Law (hereinafter, the "Code"). > According to Funtoo [2] we seem to be a 501(c)6. > [2] https://www.funtoo.org/Organization:Gentoo_Foundation > According to Wikipedia [3] we seem to be a 501(c)6. > [3] https://en.wikipedia.org/wiki/Gentoo_Linux#History > This [4] says the Gentoo has never been a 501(c)6 and since > that's in the foundation namespace, I assume it must be definitive. > > So there's a *lot* of confusing information out there, and this could > all be cleared up with some clear statement on the Wiki. As you said, > it should all be on the Wiki. :) > > [4] https://gitweb.gentoo.org/foundation/financials-rfp.git/plain/build/gentoo-foundation-rfp.pdf So we reach a conclusion: - we are a corporation - In New Mexico: bound by the rules of a non-profit corporation - AND for the IRS: filing & paying taxes as a private corporation - AND *voluntarily* holding ourselves to the STRICTER rules that a 501(c)(6) would follow, specifically because that permits future transition to a 501(c)(6) status. (see https://www.irs.gov/charities-non-profits/other-non-profits/life-cycle-of-a-business-league-trade-association-jeopardizing-exemption) In some ways, this means right now we're in one of the worst possible spots in terms of our status: we play by stricter rules than we have to, and don't get any of the benefits of being a federally recognized non-profit corporation. You may find the IRS Exempt Organizations-Technical Instruction Program for IRC 501(c)(6) Organizations to be of interest. https://www.irs.gov/pub/irs-tege/eotopick03.pdf If the Foundation & Council cannot find an Umbrella who is mutually agreeable to have us as a project, we wind up in some of the other options of the future state of the Foundation. The *cheapest* option is to go full-private corporation, but that risks the takeover concerns and I believe would be in bad faith with the membership and the larger Gentoo culture. The most expensive is transferring or forming a new 501(c)(3), with a 501(c)(6) being a middle ground. -- 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