Why the IRS is Targeting Open Source Software Groups • Hacker News Board

Re: Why the IRS is Targeting Open Source Software Groups

#41

Post by samolang » Tue, Jun 25, 2013, 9:32 PM UTC

snowwrestler wrote: post #36

newbie12 wrote: post #25

Earlier quoted context omitted.

To be fair, in the case of the Tea Party they delayed applications through the election, and there's also evidence the IRS handed donor information to outside groups.

> in the case of the Tea Party they delayed applications through the election Which shouldn't matter if they actually are social welfare organizations. If the election is that important to them, maybe they actually were hidden political orgs after all.

The law states that 501c groups are allowed to participate in politics so long as 51% of their money goes towards social welfare. For example, [1]. Would you say the same thing if planned parenthood was denied non-profit status because it is a liberal organization.

[1] http://www.opensecrets.org/pacs/pacgot.php?cmte=C00314617&cy...

Re: Why the IRS is Targeting Open Source Software Groups

#42

Post by snogglethorpe » Tue, Jun 25, 2013, 9:33 PM UTC

sliverstorm wrote: post #30

adestefan wrote: post #15

Earlier quoted context omitted.

People complain that government doesn't do a good enough job, but then people complain when government tries to do a better job.

Totally. Just earlier today I was reading something about how the IRS taxes citizens who have their wealth abroad. People were very angry! But these are the same people who want more taxes on the rich. All I could think was, 'Hold up a second guys, aren't you familiar with the key ways the rich avoid taxes?'

The thing is, the IRS "taxes citizens who have their wealth abroad" even if they have no significant financial/business links with the U.S. (they live/work/invest entirely outside the U.S.), and even if they aren't wealthy...

I'm all for catching tax cheats when that's actually what's going on, but the IRS policies here are often just downright douchey...

Re: Why the IRS is Targeting Open Source Software Groups

#43

Post by samolang » Tue, Jun 25, 2013, 9:41 PM UTC

SomeCallMeTim wrote: post #37

snowwrestler wrote: post #36

Earlier quoted context omitted.

> in the case of the Tea Party they delayed applications through the election Which shouldn't matter if they actually are social welfare organizations. If the election is that important to them, maybe they actually were hidden political orgs after all.

Wow, if you're being downvoted for saying that, I guess there must be a lot of Tea Party supporters here who are misusing downvotes to express disagreement. Or maybe they don't get that political organizations should not ever be charitable "social welfare" organizations, on the left or the right. In any case, it seems to me that you've got an excellent point. And the fact is that there's tons of evidence that the IRS…

First of all, the IRS admitted to and apologized for specifically targeting conservative groups. Denying it at this point is absurd.

Second of all, the legal definition of a "social welfare" organization is that it spends at least 51% of its money on social welfare. So legally it's allowed to spend the other 49% of its money on politics. Plenty of organizations, both liberal and conservative, take advantage of this rule.

Re: Why the IRS is Targeting Open Source Software Groups

#44

Post by counterpointer » Tue, Jun 25, 2013, 9:50 PM UTC

samolang wrote: post #41

snowwrestler wrote: post #36

Earlier quoted context omitted.

> in the case of the Tea Party they delayed applications through the election Which shouldn't matter if they actually are social welfare organizations. If the election is that important to them, maybe they actually were hidden political orgs after all.

The law states that 501c groups are allowed to participate in politics so long as 51% of their money goes towards social welfare. For example, [1]. Would you say the same thing if planned parenthood was denied non-profit status because it is a liberal organization. [1] http://www.opensecrets.org/pacs/pacgot.php?cmte=C00314617&cy...

No it's more nuanced than the 51% number.

The actual law passed by Congress says "exclusively for social welfare". IRS interpretation changed that to "primarily social welfare" a few decades ago which is actually wrong since IRS cannot make laws, only implement them as written. There was a huge ruckus in congress over this matter. Can't find the video now but here's an article:

http://www.psmag.com/politics/the-irss-tea-party-tax-row-how...

Re: Why the IRS is Targeting Open Source Software Groups

#45

Post by a_p » Tue, Jun 25, 2013, 9:52 PM UTC

The real scandal here happened in 1959. When Congress passed created 501(c)(4)s, the law said that (emphasis is mine): "Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare".

In other words, 501(c)(4)s were intended to be allowed to spend NO MONEY on politics. However, a 1959 IRS regulation decided that "exclusively" (0%) really meant "primarily"(up to 49%), and in doing so they completely changed the spirit of law, which was not only illegal, but made the new law a nightmare difficult to enforce. Every single 501(c)(4) that has spent money on politics since 1959 has been in violation of the law passed by Congress — which means that the real law is almost guaranteed not to be enforced.

http://blogs.reuters.com/great-debate/2013/06/17/the-real-ir...

Re: Why the IRS is Targeting Open Source Software Groups

#46

Post by jpdoctor » Tue, Jun 25, 2013, 10:20 PM UTC

snowwrestler wrote: post #35

jpdoctor wrote: post #27

Earlier quoted context omitted.

> without (a) having to pay tax on them as income, But that is my point: The expenses write off against the revenue in the biz, so there's no point in creating a separate org. There can't be sizeable income left in the separate org, or they get nailed for having assets. > (b) having to follow the normal reporting requirements for political groups. That's different, but I got the sense from the article that it was mor…

The tax issue actually goes the other way--individuals can take a personal tax deduction on most donations to 501c orgs, but not to for-profit companies.

Aha, it's because they think their income will go up from donations of individuals? That makes more sense.

Re: Why the IRS is Targeting Open Source Software Groups

#47

Post by dllthomas » Tue, Jun 25, 2013, 10:46 PM UTC

ryanisinallofus wrote: post #8

If huge corporations are hiding parts of their operations under a 501c status it SHOULD be looked into. Don't fall into the trap that Tea Party members fell into. This is not a scandal. Don't cry about it. No big deal.

But those of us trying to organize funds for FLOSS projects serving the public commons have a harder time raising money. That's a big deal. It's not really new info, though perhaps more confirmed - this is what people were telling us before even the Tea Party piece of this broke.

Re: Why the IRS is Targeting Open Source Software Groups

#48

Post by Guvante » Tue, Jun 25, 2013, 11:12 PM UTC

counterpointer wrote: post #44

samolang wrote: post #41

Earlier quoted context omitted.

The law states that 501c groups are allowed to participate in politics so long as 51% of their money goes towards social welfare. For example, [1]. Would you say the same thing if planned parenthood was denied non-profit status because it is a liberal organization. [1] http://www.opensecrets.org/pacs/pacgot.php?cmte=C00314617&cy...

No it's more nuanced than the 51% number. The actual law passed by Congress says "exclusively for social welfare". IRS interpretation changed that to "primarily social welfare" a few decades ago which is actually wrong since IRS cannot make laws, only implement them as written. There was a huge ruckus in congress over this matter. Can't find the video now but here's an article: http://www.psmag.com/politics/the-irss-…

Except thanks to the complexity of laws, the IRS and other federal agencies are tasked with interpreting and enforcing said laws.

If Congress didn't like the interpretation they could have just passed a new law clarifying that fact.

Re: Why the IRS is Targeting Open Source Software Groups

#49

Post by samolang » Tue, Jun 25, 2013, 11:24 PM UTC

counterpointer wrote: post #44

samolang wrote: post #41

Earlier quoted context omitted.

The law states that 501c groups are allowed to participate in politics so long as 51% of their money goes towards social welfare. For example, [1]. Would you say the same thing if planned parenthood was denied non-profit status because it is a liberal organization. [1] http://www.opensecrets.org/pacs/pacgot.php?cmte=C00314617&cy...

No it's more nuanced than the 51% number. The actual law passed by Congress says "exclusively for social welfare". IRS interpretation changed that to "primarily social welfare" a few decades ago which is actually wrong since IRS cannot make laws, only implement them as written. There was a huge ruckus in congress over this matter. Can't find the video now but here's an article: http://www.psmag.com/politics/the-irss-…

So there's a law that states "exclusively for social welfare" and there's a law that says its okay to participate in non-social welfare activities? The laws sound contradictory to me and it seems like the IRS has a pretty good justification for their interpretation. Either way, whatever they rules are they should apply equally to all people/organizations.

As an aside, I wonder if you could make the legal argument that political donations are considered social welfare? If planned parenthood can call giving out birth control social welfare, then why can't it call advocating for the availability of free birth control social welfare? If advocating for the availability of free birth control is social welfare and political donations are covered by free speech, then why isn't giving political donations to candidates that support the availability of free birth control considered social welfare?

Re: Why the IRS is Targeting Open Source Software Groups

#50

Post by roboneal » Wed, Jun 26, 2013, 12:56 AM UTC

casual_slacker wrote: post #40

roboneal wrote: post #32

Earlier quoted context omitted.

He said that on March 30, 2012, NOM became aware that the Human Rights Campaign, the pro-gay rights group, obtained confidential information of its donors and posted the information without redacting the names. That information later appeared on websites like the Huffington Post. NOM discovered another document with redactions that had been posted. A computer analysis, after removing the document's redaction layer, d…

The testimony states only that documents originated within the IRS. There isn't any indication of the means in which they were released. What would be the political sense in releasing the names of donors? A rogue leaker seems more likely to me. Testimony: http://waysandmeans.house.gov/uploadedfiles/eastman_testimon...

You asked for "evidence". Obviously, this evidence requires further investigation.