Despite the fact that Open Source Software foundations have existed for years, the IRS has apparently just decided that they are not allowed to be non-profits.
In a disturbing precedent, the Yorba Foundation, which makes apps for GNU/Linux, has had its nonprofit status application rejected by the IRS because some of projects may benefit for-profit entities.
Here's the thing: I do not think that this has anything to do with OSS, specifically. I think that OSS just happens to be a nice starting point for the IRS to test out a nice, new, shiny +5 Phrase of Vaugeness against a soft target that has little or no capability of fighting back.
"May benefit for-profit entities."
Think about it. There is a lot - an awful lot - of potential tax money there for the taking, after all. They just need to come up with a way to justify it, and get a few examples on the books to establish a precedent. With this phrase, they do not even need to show that a non-profit is actually doing anything in particular. Just suggesting that they might do an unquantifiable something for an unidentified someone at an undisclosed sometime is enough to yank their 501(c)(3) status.
Anyone want to lay odds that some of those annoyingly conservative non-profits are going to be hearing this phrase in the near future?
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