X.Org Foundation Loses Its 501(c)(3) Status
phoronix.com
phoronix.com
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?
If they were late to file for ONE year... maybe I'd be more sympathetic. But NEVER filing?
Incompetence. Stupidity. There's no nicer way to put it, no other way to spin it.
Note that I'm not speaking in this particular case or trying to say it's not his fault (it is), but in general.
It's seventeen pages of zeros and checks. If you want to see what a zeroed 990 looks like: https://drive.google.com/folderview?id=0By7AdX1eMEY2LUp6SG1T...
The careful eye will note on p. 13 where I screwed up on the e-version, and so the scanned (and sent) version has hand-written checkmarks. It's a good idea to dot your eyes and cross your ts on these forms.
There's also a 199 there, which is the state equivalent of the federal form.
In the case of non-profits, the IRS is providing oversight that the non-profit is actually acting as a non-profit and doing good (very broadly defined) in the world. It's a check against people running a non-profit that doesn't do anything but make a few people rich.
Surprisingly the IRS really does not make life difficult for non-profits.
I'm as libertarian as they come, but corporate taxes and all their byzantine systems are not like a personal income tax, where you can go to jail or have your wife and child shot for not paying up - it kind of is an opt-in system. So there is somewhat of a categorical difference.
If they had no revenue are they even required to file at all? I know that for personal income if you do not owe any additional tax than has already been collected then there is no requirement to file.
Since they didn't get 501c3 status until 2012, the 990 doesn't seem appropriate except for this most recent year anyway.
Yes.
> Since they didn't get 501c3 status until 2012, the 990 doesn't seem appropriate except for this most recent year anyway.
All nonprofits with an EIN need to file 990s even if you don't have 501(c)(3) status. Corporations are not individuals so there are different rules. The rules for registered nonprofits are stricter than for-profits - AND screwing them up can jeopardize attempts to get 501(c)(3) down the line, although typicially the IRS will be reasonable, if you make a handful of trivial mistakes here and there they won't kill you.
I'm not a US citizen, but I would expect the IRS to behave differently when dealing with organizations as opposed to citizens?
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.
So he's really just an engineer that they gave the accounting work to. That probably explains quite a bit.
But since nobody thought to file taxes (or make sure they got filed), I'm assuming they didn't think to do that either.
This degree of incompetence is troubling, especially given the massive array of resources X.Org could have called on for help in ensuring the foundation was being run correctly.
Having been in another non-profit that also failed to notice this, if you ask the IRS very nicely, they'll usually let you come back into compliance quickly.
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.
- 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.
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.
Oh no, don't you dare. You cannot just say something like that and then just leave the entire Internet hanging.
Fire that accountant, get someone who's going to take it seriously.
Its actually easier to file a volunteer, since, compared to a paid employee, they are less likely to have any claim against you if you do and they aren't happy with it.
Of course, it can be hard to get a better replacement for the same money for an incompetent volunteer in a skilled field, but that's an issue of difficulty replacing the volunteer, not difficulting firing them.
That's why we need Wayland and Mir, right?
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.
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.
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...
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".