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The IRS vs. Open Source

simonstl writes "The IRS wasn't after just the Tea Party, Progressives, or Medical Marijuana: Open Source Software was a regular on IRS watch lists from 2010 to 2012. Did they think it was a for-profit scam, or did they just not understand the approach?"

6 of 356 comments (clear)

  1. Valid Reasons by Anonymous Coward · · Score: 4, Informative

    "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."

    The fact that for profit businesses are using open source as a tax break excuse is reason enough for investigation. The IRS wants to collect taxes, not give tax breaks. Of course it would investigate people seeking tax breaks on potentially shaky grounds...

    1. Re:Valid Reasons by Sponge+Bath · · Score: 4, Informative

      The IRS wants to collect taxes...

      More correctly: the IRS is required by law (written by congress and signed by the president) to collect taxes and make determinations of status related to taxing.

  2. Re:Tax dodge by benjfowler · · Score: 5, Informative

    Consumption taxes weigh particularly heavily on people with little money.

  3. Re:Open source equates to freedom. by Anonymous Coward · · Score: 5, Informative

    Please tell me this post is a joke post.

    And no-one else was affected because it was a hack made to the source by a developer on a distro few people use. I don't believe that change made it into any of the Debian-based distros.

    Yeah, none except for Ubuntu. But that's just a distro that "few people use", right?

    http://www.techrepublic.com/blog/opensource/find-and-fix-weak-opensslopenssh-keys-debian-based-linux-vulnerability/210

    A recent vulnerability was found in the OpenSSL package as provided by Debian and Debian-based Linux distributions, such as Ubuntu, that broke the effectiveness of the OpenSSL PRNG (Predictable Random Number Generator). This vulnerability caused OpenSSL to generate weak keys for anything relying on OpenSSL, including SSL certificates, OpenSSH keys, and OpenVPN keys. Any OpenSSL-based key generated on a Debian-based system since September 2006 by the openssl, ssh-keygen, or openvpn –keygen commands are vulnerable to this issue.

    That you were modded up for your completely wrong post is just another sign that Slashdot is full of morons.

  4. Re:Open source equates to freedom. by tbannist · · Score: 5, Informative
    Hmm, according to the Heritage Foundation, the U.S. ranks 10th, and according to the Fraser Institute the U.S. ranks 7th. Freedom House's ranking doesn't easily lend itself to ranking countries in the top category. Heritage foundation top 10:

    1 - Hong Kong
    2 - Singapore
    3 - Australia
    4 - New Zealand
    5 - Switzerland
    6 - Canada
    7 - Chile
    8 - Mauritius
    9 - Denmark
    10 - United States

    Fraser top 10 (Chapter 3, page 9):

    1 - New Zealand
    2 - Netherlands
    3 - Hong Kong
    4 - Australia
    5 - Canada
    6 - Ireland
    7 - United States of America
    8 - Denmark
    9 - Japan
    10 - Estonia

    So they seem to be in agreement that Australia, New Zealand, Canada, Hong Kong are freer than the United States.

    --
    Fanatically anti-fanatical
  5. Re:Open source equates to freedom. by Kelbear · · Score: 5, Informative

    He's probably just having the knee-jerk reaction that the editors want, and hasn't read the article. Given that it's only about a paragraph or two of actual text, here's all the relevant information:

    " Amidst the blacked-out redactions, this turned up on the watch list, page 13:

    Open Source Software

    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.

    There is no specific guidance at this point. If you see a case, elevate it to your manager.

    I would guess that the IRS was suspicious of Open Source Software because it figured that it was primarily a profit-driven project. Perhaps they had had some applications that clearly benefited only a single profit-making sponsor, or perhaps they simply hadnâ(TM)t understood the dynamics of open source.

    By February 8, 2012, they had added âoeThe software is provided for free, however, fees are charged for support by the for-profit,â and specified a contact for the cases."

    Taking a step back to think about what non-IT people think of an organization comprised of for profit businesses and their employees, requesting non-profit treatment...it's not at all surprising for additional investigation to take place. It makes sense for them to want to take time to understand exactly what the organization is doing to avoid approving an organization that may not be for the advancement for the public good, but rather a simple tax-dodge for underlying businesses.

    I mean, who would prefer that the IRS hand out tax-exemptions willy-nilly without any judgement?