[Date Prev][Date Next] [Thread Prev][Thread Next] [Date Index] [Thread Index]

Re: By the way, what is "Debian Association, Inc."?

>> From: Fernando Alegre <fernando@mars.superlink.net>
>> > So, the obvious question is "what is Debian Association, Inc.?"
>> Ian Murdock formed the corporation. I think it is not a charitable nonprofit
>> because he didn't know how to do this at the time. Also, Linux International
>> is not currently a charatible nonprofit. I think we need an accountant or
>> attorney who will work pro bono to help us with this. The present legal
>> organization is not quite what we eventually want it to become. We need to
>> have two separate entities - the project itself, and a charitable nonprofit
>> foundation used to make tax-deductable donations to the project. I know of
>> lots of organizations that do this (ARRL, the big U.S. ham radio club is one).
>> I wouldn't want to file the papers on my own, though.
>> 	Bruce
>> --
>> Bruce Perens <Bruce@Pixar.com> Pixar Animation Studios
>> Toy Story: > US$177M domestic box office receipts and an Oscar so far.
>I think most states let entities organize as non-profit corporations
>(no stockholders, other constraints), while tax-exempt status is an
>IRS thing, and much more stringent, painful, and _expensive_ to attain.
>So a business in my state can incorporate non-profit for about $25 in
>a few days, but to incorporate as non-profit + tax-exempt takes at least
>$700 (that's just the ~ IRS filing fee, no lawyers$) and a minimum of
>6 months for the IRS tax-exempt determination (1 year is more typical).

Yes, this is true.  I am president of a non-profit corporation in the
state of Tennessee.  Our organization is used to promote both
recreational and competitive youth basketball in our community.  We
are not tax-exempt.

>Unless you're a big-budget organization that wants to be tax-exempt
(?), >the IRS hassles just aren't worth the pain.  Our Linux users
group formed >as non-profit but not tax exempt, since we didn't want
to hit up the >group membership for the costs to go tax-exempt.
Non-profit tax-liable >is our only real alternative.  Our members know
we're not in it for the >money, so we try to have a zero-cost,
zero-income operation.  _Any_ >money in or out of the organization
creates a tax accounting nightmare >that is just no fun for a
volunteer organization.  > This is also true.  In order to become tax
exempt, it becomes an accounting hassle.  One must account for every
dollar spent in a very vigorous manner.  In particular, all payments
for labor must pay the social security tax and report to IRS as earned
income per individual.  This gets to be very expensive and ridiculous
for small organizations like ours (and your too I'm sure)!.  What is
worse, it is precisely these small organizations that really need the
tax break.  For example, when it comes time for me to go purchase
basketballs, I have to pay 8.5% sales tax on top of the cost of the
basketballs.  This type of expense is not fair for volunteer
organizations and should be correctable.

| James D. Freels, P.E._i, Ph.D.  | Phone:  (423)576-8645  |   | L |
| Oak Ridge National Laboratory   | FAX:    (423)574-9172  | H | I |
| Research Reactors Division      | Internet: fea@ornl.gov | F | N |
| P. O. Box 2008                  | Reactor Technology     | I | U |
| Oak Ridge, Tennessee 37831-6392 | world's best neutrons! | R | X |
| out the 10Base-T, through the router, down the T1, over the      |
| leased line, off the bridge, past the firewall...nothing but Net |

Reply to: