
X.Org Foundation Loses Its 501(c)(3) Status - protomyth
http://www.phoronix.com/scan.php?page=news_item&px=MTQ0MzU
======
cperciva
_we 've Never filed returns since our first re-organization to the LLC in
2005. I was taken by surprize that the IRS hit us so rudely._

Wait, am I reading this right? They've never filed tax returns for the past 8
years, but it's "rude" for the IRS to do something about it?

~~~
mscarborough
> we've Never filed returns since our first re-organization to the LLC in
> 2005.

I'm sure plenty of HNers can attest, you aren't exempt from taxes because
you're an LLC. Plenty of us file our own LLC taxes, yet a 'professional'
accountant in charge of a full organization thought it would be an OK business
thing to ignore altogether?

Hopefully they find better representation, this is egregious.

~~~
rgbrenner
The article never calls him a "professional accountant". He's the accountant
of X.org, but in fairness, he's really a system engineer. He's never been an
accountant anywhere: [http://www.linkedin.com/pub/stuart-
kreitman/5/185/942](http://www.linkedin.com/pub/stuart-kreitman/5/185/942)

So he's really just an engineer that they gave the accounting work to. That
probably explains quite a bit.

~~~
Zelphyr
Not really. Most engineers I know are at least smart enough to know that if
you don't pay your taxes for eight years you're going to have a problem with
the IRS.

~~~
fnordfnordfnord
Yup, experience taught me that in 1/8th of that amount if time.

------
jamesaguilar
> "The status of the 501c3 is lost because we (me) failed to file the 3 past
> years' tax returns on time. Note that we've Never filed returns since our
> first re-organization to the LLC in 2005. I was taken by surprize that the
> IRS hit us so rudely. I've had little issues with my own returns and have
> always found them to be reasonable and friendly."

I'm not an accountant, so I can't make a definitive statement, but this sounds
like really poor accounting to me. Maybe that's too specific. It sounds like
really poor management of responsibility and time _in general_. If you're not
going to do the work, you should at least tell the person you are responsible
to so they can replace you.

If I were his manager and I heard about this, I'd be double checking his work
for quite some time to make sure he wasn't under-performing his role at his
actual job too.

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afreak
There are two organisations that I fear:

\- Canada Revenue Agency (CRA)

\- Department of Fisheries and Oceans (long story)

I do not fear CSIS, the RCMP, or the CSE oddly.

The CRA (like the IRS) will make your life a living hell if you do not file
properly. I was once a member of a not-for-profit organisation that was
shutdown by the CRA due to the incompetence of its treasurer. The treasurer
refused to file on a yearly basis under the guise that it wasn't necessary. It
was difficult to remove the person as it was a three-person body that ran the
NFP company with a directors board underneath to handle all other affairs--I
had several years in the directors board.

Looking back it was a dumb structure but it made sense at the time at least.

Eventually the CRA got wind of our not-filing due to our status as a
corporation under the Business Corporations Act in British Columbia, and thus
seized all assets and shut it down. It recently rebirthed as a non-profit
organisation (with people who do know what the hell they're doing), but it
left a good friend of mine almost in a compromised financial state, another
person unable to get a business of their own due to disqualification from tax
credits, and another person (the treasurer themselves) ended up going AWOL.

Don't fuck with the government body that wants your tax dollars even if you
don't have to do anything more than fill out a one-page form.

~~~
cperciva
_The CRA (like the IRS) will make your life a living hell if you do not file
properly_

If you don't file at all, sure. If you make the occasional mistake? Not really
a problem -- the CRA just phones up and asks you to clarify the situation.
I've had my tax returns fixed this way several times, without any penalties or
even paperwork required.

~~~
afreak
Innocent mistake? Probably going to be fine. Not filing because you're
clueless? Different story.

------
webreac
Am I the only one to read that an Oracle employee has caused damages to an
open source organisation ?

~~~
srl
Pretty sure Hanlon's razor is in full force here. Oracle's done enough shitty
stuff - we don't need to go out of our way to pin nonsense like this on them.
(Besides, AFAIK, X.org is in no way a competitor to any part of oracle, so
it's not like they care.)

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nicholassmith
Wait, what? There's an accountant and they've never bothered filing and now
he's distressed because normally the IRS is super helpful?

Fire that accountant, get someone who's going to take it seriously.

~~~
throwaway92785
You can't fire a volunteer.

~~~
cdcarter
As someone who's been a volunteer coordinator for an organization using ~550
volunteers a year, yes, you can fire a volunteer.

------
eli
Kinda sounds like they'd be much better off under the umbrella of another
organization anyway.

------
j_m_b
I like that their minutes are irc logs

[http://www.x.org/wiki/BoardOfDirectors/IrcLogs/](http://www.x.org/wiki/BoardOfDirectors/IrcLogs/)

------
nine_k
> _X.Org has lost funds in the past due to banking issues, PayPal issues, and
> an assortment of other actions due to either delayed action or inaction on
> the behalf of the accountant and the board._

That's why we need Wayland and Mir, right?

------
cdcarter
"Per the IRC meeting minutes, the board is now thinking about having the X.Org
Foundation join an umbrella organization like the SPI, the Apache Foundation,
or other free-software-focused organizations for riding some benefits like a
non-profit status while having to deal less in paperwork and other managerial
matters."

I do hope that any organization that considers offering fiscal sponsorship or
controlling X.Org entirely requires a full comprehensive audit before moving
forward. "Deal[ing] less in paperwork" is something you get to do when your
finances are in good condition, not when they're a wreck.

~~~
nknighthb
I think it more likely the X.Org Foundation would just dissolve. The licensing
ensures that moving the project is a simple matter of the individual
developers choosing to operate under a different banner. No link needs to be
established between the foundation and SPI/Apache/whatever.

The only question is where the X trademarks might be. If they're still with
the Open Group, no problem. If they got transferred, it's a little more
complicated.

------
erbo
I want to see something like "The people responsible for this utter
incompetence have been sacked. And the people responsible for sacking those
people responsible for this utter incompetence have _also_ been sacked."

------
darcrossito
Someone forgot to google basic stuff.
[http://www.nonprofitrisk.org/library/articles/How_to_Lose_Yo...](http://www.nonprofitrisk.org/library/articles/How_to_Lose_Your_Tax_Exempt_Status.shtml)

------
gyepi
On the surface, this seems like a tale of incompetence but the board seems to
have taken it in stride, is considering joining a larger organization and
wondered why they had not made the move sooner. In context, this is much less
of a story than it appears.

[http://www.x.org/wiki/BoardOfDirectors/IrcLogs/2013/08-22/](http://www.x.org/wiki/BoardOfDirectors/IrcLogs/2013/08-22/)

------
skadamat
Wow what a bunch of morons

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altero
LOL

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jostmey
Here is an example where the IRS has gone after a legitimate non-profit
organization. And yet how many organizations maintain non-profit status as a
way to avoid higher taxes?

~~~
freiheit
No, it's not.

When you're a non-profit, you file paperwork with the IRS (a form 990 or
990-EZ) that details your income, expenses, officers of the corporation,
highest paid employees/contractors (especially ones receiving over $100k),
programs (and their accomplishments), etc. You don't actually _pay_ any taxes,
but you do "file taxes with the IRS". The data in that form 990 is used to
back up the fact that you are legitimately a non-profit corporation serving
the public interest.

If a non-profit isn't filing their form 990 every year, they don't look
legitimate at all. They probably _aren 't_ legitimate if they're not filing a
form 990.

The article mentions that they hadn't done any major fundraising drivers or
solicitations for donations from major corporations. If they weren't filing
the form 990 for years, that's no surprise, since the form 990 is public
information that any major donor would know to look at (or to look at a
summary or analysis of the information via guidestar or something like that).

Look at the summary of this information and ask yourself if you'd donate $1
after you read it: [http://www.guidestar.org/organizations/26-4691413/xorg-
found...](http://www.guidestar.org/organizations/26-4691413/xorg-
foundation.aspx)

~~~
Zelphyr
Wait. So they didn't even actually owe any money? All they had to do is send
the IRS a form (and potentially an EZ one at that) once a year?

I wouldn't consider myself litigious but it sounds to me like there is a legal
case against the X.org board and this "accountant".

