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BLOG: Open source projects aren't tax scams

Simon Phipps | July 1, 2013
IRS is eyeing open source projects and Tea Party groups as possible tax scams, raising a real question: Do open source foundations need nonprofit status?

There's no doubt the targeting by the IRS — especially its uncertainty and opacity — is an annoyance to and a drain on nonprofits. Kuhn told me:

We work hard to ensure beyond a shadow of a doubt that we've followed the spirit and letter of every possible IRS rule, but it's admittedly extra work for that level of perfection. I wonder sometimes if the IRS realizes they've caused that sort of staffing consequence for orgs like ours.

Maybe the answer is for open source foundations to get out of the nonprofit world. Tax breaks are fine, but they aren't the primary goal of open source foundations. What matters to their communities is that they have transparent, equal governance that allows everyone to contribute to and benefit from the project without obstruction. The IRS does not warrant that; it's a matter instead of community scrutiny. Maybe this newly publicized IRS behavior is an opportunity for us to refocus open source communities on what really matters to them — open, accountable community governance — and perhaps even do without nonprofit status altogether, at least until the IRS hasreviewed its processes and gained a better understanding of the true nature of open source.

What if you really do need nonprofit status? Perhaps instead of trying to start your own nonprofit, you should join an existing one. There will be a parade of possible candidates in a session Bradley Kuhn is running at OSCON in Portland, Ore., on July 25. If after all this you really believe you should start a new open source organization, please come to the "Community Foundations 101" tutorial I am running at OSCON on July 23, when a distinguished group of leaders from the FLOSS Foundations List will share their experience and insight with you.

After that, I doubt you will think there is any connection at all between open source projects and the Tea Party.


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