[OpenStack Foundation] OpenStack Foundation Tax Status
jonathan at openstack.org
Tue Jul 15 16:44:21 UTC 2014
You may have noticed a lot of discussion around FLOSS Foundations and IRS tax status over the last couple of weeks. The OpenStack Foundation has come up in some of these conversations, and I just wanted to send a short note out to let everyone know our status and where we are in the process.
The OpenStack Foundation is incorporated in Delaware as a nonstock, nonprofit corporation. This means that we are organized and required to operate as a non-profit business as we have been doing since formation. In our corporate filings, we specifically organized as a corporation that would work within the requirements of 501(c)(6) of the tax code. This type of organization is the same as some other Foundations—like the Linux Foundation—and fits with our purpose to improve conditions in the cloud computing industry by helping to organize the collective efforts of our community (developers, users, and organizations). Some other FLOSS Foundations are organized and exempt under 501(c)(3), which is intended for charitable organizations and has a different set of criteria for qualifying.
After formation, we requested that the IRS provide a determination that we would be exempt from paying US federal taxes under section 501(c)(6). As
Mark McLoughlin mentioned in his summary from the Atlanta Board meeting (http://blogs.gnome.org/markmc/2014/05/17/may-11-openstack-foundation-board-meeting/), the IRS responded late last year with a set of additional questions from our application and then again earlier this year with an initial denial of our request to be exempt. This is not a final determination, and at this point we are still in the process of working with the IRS to clarify why we do meet the requirements of 501(c)(6). The next step is for us to have an in-person meeting with an IRS representative later this month.
In summary, we ARE a non-profit and will continue to be, however we have not been recognized as a tax-exempt organization by the IRS. We are still working through that process and will continue to over the coming months. Next week at OSCON, I think there is going to be an informal gathering around exempt issues in general for FLOSS organizations that some of us will be participating in. If you have any questions feel free to let me know or track me down if you’re in Portland next week. Thanks,
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