Slashdot Mirror
IRS Looking at Google/Mozilla Relationship
ric482 writes "With the release of the Mozilla Foundation's 2007 financial report, questions have been raised by the IRS, who are due to perform an audit on the non-profit organization behind the massively popular Firefox browser.
Last year, the Foundation received $66 million of its total $75 million revenue (88 percent) from search engine maestros Google, so the IRS are looking for blood over the organization's tax exempt status. Back in 2006, Mozilla got $59.5 million from Google — around 85 percent of the organization's revenue.
Google and Mozilla are part of a 'you scratch my back, I'll pay your bills' sort of agreement, with the Google search bar firmly placed in the toolbar, and on the default homepage. Things were a bit rocky a couple of months back when Google unveiled the Beta-run of its Chrome browser, but Mozilla and Google hugged it out and sealed a deal that will last for another three years. That deal will expire in November 2011."
Why not blame Microsoft? Maybe they filed a complaint with the IRS.
Unleash the conspiracy theories!
John
It's true then! Google is really an evil Mafia-type organizations hence the quick rise to popularity and Mozilla is their money laundering machine!
The gig is up guys!
My version of Firefox just has a regular "search bar" that defaults to Google.
If I want another search, e.g., AbeBooks.com, I just change it to that. Does it become an "AbeBooks.com search bar" then?
Would it kill you to put a link in there somewhere?
http://www.mozilla.org/foundation/documents/mf-2007-audited-financial-statement.pdf
To me, there shouldn't be much a fuss about big corporates supporting open source. In fact, I think there should be more involvement (financially) for those big companies who no doubt have benefited from the open source community. As long as the licensing remains open source, everything is transparent...
What makes Mozilla different than say a non-listed private company?
They give away the browser and spend all of their revenue on development. So, how much taxable profit did the Mozilla foundation make anyway? The IRS has nothing to gain from this. I smell a rat closeby!
cat sig >
...and not after some other fictional 'non-profit' organizations?
Any life is made up of a single moment, the moment in which a man finds out, once and for all, who he is.
back in the yahoo story a few days ago, i told that it smelled microsoft all over, and then modded to oblivion and yanked with replies defending microsoft, saying there was NO wrongdoing on microsoft's part, despite the investigation was started by DOJ, which is still populated with the neocon administration which has been WAY chummy with microsoft.
now, suddenly, IRS gets in the picture, and on the target there a major competitor and a major headache for microsoft. despite there are numerous open source software using same kind of deal with various corporations for funds, somehow, for some reason, its google+mozilla that irs feels the need to investigate.
of course, that again has no relation to microsoft, which is best pals with the neocon administration still in power. the thing is just a coincidence.
Read radical news here
85% of Mozilla's funding comes directly from Google?!? For all practical purposes, Google basically owns them. No wonder Mozilla was so forgiving of Chrome.
SJW: Someone who has run out of real oppression, and has to fake it.
seek topost (thatflamebait);
Firstpost (the thread, fast);
while ($natalie) {
petrifies $to($stone);
not grits;
}
accept the, moderation;
seek the, $-1Troll, $-1offtopic'
and wait;
stat thekarma;
unlink and listen (for, $theflames);
for (a, karmawhore our /.) {
system ("is trollheaven");
--
.
Take all good things in moderation, including moderation.
Shouldn't the IRS be more concerned about how is mozilla spending that money than where it comes from?
If a "save the children" non-profit organization changed their name to "Google saves the children" and Google donated $100 million, they should lose the tax exemption?
"Non-profit" isn't about how much money enters the organization but how much of it is used in pushing the agenda forward. If they're spending the millions of dollars to make a better free browser, they should still be tax exempt.
If they suddenly started using that money to buy sport cars for every programmer, they should pay taxes even if Google gave them just two dollars.
What do they plan to tax? Their revenues? Is it just that whenever there's money anywhere the IRS thinks uncle sam should get a share of it? Are they claiming that Firefox is some kind of tax shelter? I don't think that's the case. . .
How come there is no story associated with this summary?
Perhaps the IRS should look to see how much Microsoft is making off of having MSN be the default in Internet Explorer... After all something has to be default, why not get some money out of it. *Yes, I understand that IE is not a non-profit and thus it is not in the same boat*
Usually, people use Google to look at relationships...really closely.
The problem with quotes on the internet, is that nobody bothers to check their veracity. -- Abraham Lincoln
The law is very rigid today. To start an organization, you have to jump through a lot of hoops and hurdles to be in compliance with everything from labor practices, to filing the right corporate status, to paying the right taxes. It would be a lot easier for society to find creative ways to reorganized itself if there were no corporate taxes.
Besides, corporate taxes are asinine. Not only are the costs transferred to the public in the form of higher costs and lost employment opportunities, most corporations have successfully figured out how to avoid paying most taxes anyway. It'd be better to just cut our losses, tighten up spending, and tax only individuals.
Wow, that's a pretty slanted writeup by ric482...
Back in 2005, before the Mozilla Corporation was created as a for-profit organization, the deal with Google went through the Mozilla Foundation. There was worry that the income derived then would need to be reviewed by the IRS (a large part of the reason the Mozilla Corporation was created in the first place). Mozilla set aside a large part of that income in case that happened and the IRS would end up disagreeing with the status of that income.
The review of that income is basically happening now (and the IRS is probably also looking at what happened since).
Mitchell says it like this:
(Lots of other interesting information in that blog entry, too.)
The IRS seems to have the usual paradigm a bit confused.
1) Find one of the few sectors making a profit
2) Take them down
3) ????
The advent of Chrome makes it hard to make the case that Mozilla and Goggle are too closely tied, or the same entity. I suspect someone is just curious about a non-profit that is generating profits.
I tried reading the report, but still couldn't quiet tell what Mozilla's expenses are.
Think Deeply.
I'd say Venus. There has always been speculation about floating cities on the planet. It's surface area would not be habitable by humans, but at a specific altitude, the atmosphere is just right for human life.
I know it sounds far fetched, but I would be interested in seeing if we could really pull something like this off...Almost Jetsons style.
The greatest revenge in life is massive success.
Sorry, this went to the wrong thread...Be nice mods. :(
The greatest revenge in life is massive success.
Hummmmmmmmmmm
I wonder how much microsoft pays the government.
If microsoft does not get it way they threaten people & buy you out.
Since Google is a profitable entity isn't this tax neutral to google? IE if Google and mozilla merged, and Google spent the same amount on development, and giving as mozilla does, google would have the same profit, and thus pay the same taxes. The only difference would be some of the last 15% (non google contributions.) Since individuals can write off gifts to Mozilla foundation, but not to google then that's the money the IRS is chasing, not googles portion of the pie.
Honestly, stop with the Debian bullshit already. Mozilla doesn't want others altering their software and still keeping their trademarks intact (which is what Debian wants to do). Debian places the *EXACT* same restrictions on their own trademarks.
Portable versions of Firefox, GIMP, LibreOffice, etc
501(c)3 is the most well-known because that is how charities organize themselves. But there are other kinds of nonprofits; for instance many of chambers of commerce are organized under 501(c)6, which allows more political activities.
Not related to the current discussion because Mozilla is a 501(c)3. Just making the point that "nonprofit" does not always mean 501(c)3.
Build a man a fire, he's warm for one night. Set him on fire, and he's warm for the rest of his life.
It's just a way to make sure one company (Google in this case) isn't using a charity (Mozilla in this case) for illegal purposes, like plain old tax evasion. If it comes to that, Mozilla simply needs to reduce the amount of money accepted by Google or rally the community to give a significant amount of money in the form of small individual donations, so the ration of Google vs others comes down.
If it seems hard to rally something that will rival Google's $66 million, a useful frame of perspective might be that the FreeBSD Foundation is working with several times the Mozilla's amount: http://www.freebsdfoundation.org/donate/ and they're managing to deal with it. (OTOH FreeBSD itself brings much money to the top donor companies so there's incentive to do it. Yes, FreeBSD developers are happy with this deal that comes from BSDL.)
-- Sig down
It's guilty when proven guilty, and MS have been found guilty enough times, in and out of court.
Convicted abuser of a monopoly position
Breaking windows for competitors products
Holding back on interopability docs
Special funding related to the SCO debacle
GPL is "viral"
Claims like "Linux breaches loads of our patents"
etc etc
Sam
blog.sam.liddicott.com
I generally feel the same way you do. Companies are basically pass-through entities for personal spending and wealth, so why tax them. And from a philosophical point of view, corporations can't vote so why should they be taxed? We're a nation of people.
However I try to keep my mind open to challenge and I saw a recent argument the other way that was intriguing. Basically it made the point that since high corporate taxes penalize profit-taking, they force money to stay in the business, which drives improvements.
By specific example, imagine a corporation is going to report $100 million in profit. If corporate taxes are very low, they'll distribute that to the shareholders. Supply-side economics says the shareholders will then invest their wealth, driving business growth.
But if corporate taxes are high, the company will put that money back into the business (lower prices, take on additional staff, buy capital improvements, etc) rather than report it as a profit. So the money is still used for business growth, but it avoids the round-trip through personal taxation and investment management fees. And it is being applied to a business that has already proven itself a winner (since it made the profit in the first place).
Build a man a fire, he's warm for one night. Set him on fire, and he's warm for the rest of his life.
Comment removed based on user account deletion
if its one incident, its fear mongering.
if its more than one consecutive incidents in close pursuit, one needs to be totally stupid not to realize something fishy is going on.
Read radical news here
microsoft has much more to lose than apple, concerning google and firefox. AND, they are on the retreat and decline at all fronts, even including OS front, after the even microsoft confirmed failure that vista has been.
on a sinking ship like this, the sentiment to find a scapegoat, a target, something to take vengeance on is sought generally. and microsoft's corporate culture is no mother theresa.
Read radical news here
Note to everyone, parent is a troll, and the above statement is an outright lie. (I felt that I had to post this and point this out so people didn't get misled into believing that statement.)
You know, Microsoft's street address also says a lot about their mentality.
Actually it's more like an "I'll pay your bills and even scratch your back a little as well" sort of agreement. Firefox had Google as the default selected search engine since before they made any agreement and before they got any money from Google, simply because the Firefox developers happened to think that Google was the most useful search engine to set as the default for their users. As for the default homepage, AIUI it's more a case of Google helping Mozilla by volunteering to save Mozilla lots of bandwith by hosting that page for them, than a case of Mozilla helping Google...
You know, Microsoft's street address also says a lot about their mentality.
Was this really that much of a deal, the IRS or Revenue Canada will always find ways to try and suck money from a stone....ummm ... sorry for the misquote of an expression, however, they know it is a ....make a profit. If they go down this road, they will also have to acknowledge the lost revenues, and as such can be retro active, so if they are not careful it might actually cost them more then they could stand to make.
non profit organization, and whatever donations, are used to pay individuals, and rent however, it does not make enough money to say
You think Mozilla didn't think this thing through?.... they used an already existing model, used by many non profit orgs. Just because they look successful, it does not mean, there is cash flow coming in, unless they have reason to believe there was mismanaged funds somewhere, and that would install criminal prosecution of the person doing this, not Mozilla themselves.
wait... the IRS has time to investigate the Mozilla foundation, but they won't touch the Morman church?!?!? I for one throw out a giant yellow WTF flag on this one.
This is true, but they're a foundation, which is a different type of non-profit to a 501(c)(3). The issue is likely to be that the IRS sees Mozilla as largely funded by a single entity. Having 90% (or whatever) of your revenue does not fit public funding goals, which I believe require at least 1/3 of funding to be from the general public.
is that you?
Si vis pacem, para bellum! For evil to succeed good men need only do nothing!
I'm guessing that if the IRS determines that the Mozilla foundation is being operated so that there is significant self-dealing with their substantial-contributors (e.g., google), the mozilla foundation will likely get penalized for this. This would be like if microsoft contributed to a charity and that charity turned around and bought and excessive amount of microsoft software. Here's the IRS page on this subject.
http://www.irs.gov/charities/charitable/article/0,,id=96114,00.html
In addition, there are several restrictions and requirements on private foundations, including:
1. restrictions on self-dealing between private foundations and their substantial contributors and other disqualified persons;
2. requirements that the foundation annually distribute income for charitable purposes;
3. limits on their holdings in private businesses;
4. provisions that investments must not jeopardize the carrying out of exempt purposes; and
5. provisions to assure that expenditures further exempt purposes.
You can rest easy on this one.
Any IRS questions into the relationship will meet with stiff resistance as everyone knows that Mozilla is a religion and, therefore, any expression of it is protected by the U S Constitution.
The current courts have demonstrated sympathy towards the protection of the religion of Money and its free expression, so I don't see where this could be an issue.
Corporations don't pass expenses on to their customers. Period.
If competition allows them to raise their prices without losing (too much) business they will, regardless of costs. They charge the highest price they can get away with.
Why you young whipper snapper. I remember when Lynx and Mosaic first came out. When pages were all TEXT. And we LIKED it.
Of course we liked it, there were no pop-up or Flash ads.
.
Google's revenues are almost entirely consumer add based.
Which implies that the foundation could be badly hurt in a recession.
2011 isn't that far off. If the recession cuts deep enough Google will have to retrench - and Firefox may not be off limits.
The trend lines for the web browsers are looking rather flat: Top Browser Share Trend
IE 6/7/8 75% FFX 2/3 20% Safari 5%.
There probably aren't any big gains to be made here.
No one wants to talk about the truth here.
The IRS is only interested because Google released their own browser. In the eyes of the IRS it doesn't make sense for Google to continue to give money away unless it is specifically for the write off. Of course, the IRS is incapable of understanding things like OSS. The IRS management was staffed by POS leaders who think of nothing but themselves so they assume everyone else is the same.
Hey IRS. Here is a shocker. Google wouldn't let Firefox get hit with a sudden drop in funds because... Wait for it... They are not total fucking assholes!
Of course by "total fucking assholes" I mean the most loving and wonder people, please don't audit me, to ever walk the face of the earth.
Having to work for a living is the root of all evil.
Yes, they do. Anything that factors into the cost of doing business leading to the production of a good and/or provision of a service is part of the base cost of that product or service. If you were to add a 50% tax on the use of plastic and silicon, you would increase the cost of all plastic and silicon-based products relative to the amount of plastic and silicon in them. The company would then have to raise the cost to make the same profit or go out of business. Since none of its competitors could avoid this increase because it's a tax, everyone would have to raise costs or go out of business. The result is that the government would have just dramatically increase the cost of consumer goods.
Seriously, how can you even pretend to stand there all high and mighty like you know economics, when you can't grasp a concept that is that simple? I'm not very educated in economics, myself, but at least I understand basic facts about economics like the principle that if you impose a universal burden on manufacturers, you will create a cost that must be accounted for, that the market cannot compete away.
Raise your hand, and ask for an explanation of supply, demand, and equilibrium thereof.
You're not very educated. Seriously, this would be covered in any intro to econ class.
If competition would allow a raise in prices, it would happen with or without that tax. Market prices are, by definition, as high as the market will bear.
Tax-exempt status should be used to further the efforts of organizations that provide a public service that benefits us all. Mozilla does exactly that. Religions, on the other hand, can just work towards increasing membership and the IRS wouldn't dare remove their tax-exempt status even when they openly enter the turf of politics (see California prop 8 and the Church of the Latter Day Saints). I see a double standard there.
To do list for Windows
Well, to be fair, there are good reasons for those laws, especially those that deal with safety. While I support ways of making them less burdensome to comply with in general, that's subject to other goals. I don't think it's good to release them all and race to the bottom.
Moreover, I fear that lowering corporate taxes would do little more than to get rid of what little they do pay. After all, it seems more likely that more assets would become corporate assets rather than individual assets.
Bottom line, they're not going to hire more employees unless there's more profitable work to be done.
Seriously, how do you define excessive reserves? I don't agree that any such thing exists in the universe. Any reserves, which aren't already allocated to specific expenditures are, it would seem to me to be self-obviously true, put in holding to cover future operating expenses.
I mean, consider the current economic troubles that the US and Europe are experiencing. We, right now, don't even know if, say, a few months from now, the economy will totally collapse into a great depression. I would say that *any* entity, whether it be non-profit or for-profit, should be holding as much money as possible in reserve right now, just in case revenues/donations drop staggeringly over the next year or two (seriously, if a full-blown depression hits, I could see donations to non-profit orgs dropping >50% overnight).
I don't see why having savings, even savings which some might argue are large compared to revenues (e.g. 1 or 2 years worth of operating expenses), should be illegal for a non-profit. They need to survive and continue providing the services and goods which they were created to provide, *especially* during hard economic times, the exact times when they would see the least donations.
If you look at something like Mozilla, they would probably see much more severe drops in donations than would, say, local food, clothing, housing, or medical non-profits, since most people who have any money to donate during times of economic distress, are likely going to want to help people with the necessities of life before worrying about computer software.
Now we know why Chrome is competing with Firefox - to demonstrate that the Mozilla Foundation isn't really just an 85%-owned subsidiary of Google.
I suspect that some of the funds I've donated are not being spent as required.
"I can't imagine how things could get any worse!" (some guy) "That could just be failure of imaginatioÂn on your p
FTFY...
you really expect me to be able to express my opinion of what's so fucked up in this world in 120 characters or less?
What do they plan to tax? Their revenues? Is it just that whenever there's money anywhere the IRS thinks uncle sam should get a share of it? Are they claiming that Firefox is some kind of tax shelter? I don't think that's the case. . .
I could be convinced there's something fishy out there; if you assume a top-tier US-based developer costs $133k/yr (salary.com reports level 5/5 software engineers in Silicon Valley get this, so this is a high-ball), $75 million would buy you 561 of the world's best developers. Most of the Mozilla Foundation's employees moved up to the Mozilla Corporation when that was founded. The Wikipedia page says that the Mozilla Foundation has FOUR employees.
How much is reasonable for operational and marketing costs? If we assume $15 million (a lot?), that's still $60 million left over, which would finance 449 of the most expensive software engineers in the world. Better spending would easily push the number of quality engineers past a thousand, with which I'd expect a LOT more development (vaporware counts here!) than what we've seen. And that's ignoring the fact that large amounts of code come from external corporations (and individuals) interested in fixing the calendar (etc.) or adding functionality through patches, add-ons, plugins and forks.
They aren't necessarily looking for more money. They are simply wondering where all that money went. When there's a black hole like this, it often means there is a larger problem, and that larger problem is often justly labeled "tax evasion." Whether or not Mozilla is guilty of this remains to be seen.
Use my userscript to add story images to Slashdot. There's no going back.
Really? Microsoft lied about Iraq's WMD programs? Bill Gates suggested the "Mission Accomplished" banner? Gitmo? Extraordinary rendition? Waterboarding? The economy? All Microsoft's doing!?
Get help, Twitter!