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i am somewhat surprised your attorneys have not mentioned the most
simplistic solution. if the sole purpose for incorporating is to
implement banking, there is actually no need to register for an IRS
letter. if you satisfy the state regulations and obtain an EIN you
are fine. the IRS letter does give safe harbor to donors that the
amounts given are federally deductible. of course, to your major
donors who provide moneys under grants and/or contracts there is no
practical tax-wise difference between "gift" and "business expense".<br>
<br>
if you would like the specifics re CA, here are the applicable links
granting freedom from CA taxation and franchise fees and
establishing subsequent Federal tax-filing status:<br>
<b>the state equivalent of IRC 501(c)(3):</b><br>
<a class="moz-txt-link-freetext" href="https://www.ftb.ca.gov/businesses/Exempt_organizations/Types_of_Exemptions.shtml#d23701">https://www.ftb.ca.gov/businesses/Exempt_organizations/Types_of_Exemptions.shtml#d23701</a><br>
<b>your qualifications under "Scientific" endeavors:</b><br>
<a class="moz-txt-link-freetext" href="https://www.ftb.ca.gov/businesses/Exempt_organizations/Types_of_Exemptions.shtml#Scientific">https://www.ftb.ca.gov/businesses/Exempt_organizations/Types_of_Exemptions.shtml#Scientific</a><br>
<b>your qualifications under "Educational" endeavors:</b><br>
<a class="moz-txt-link-freetext" href="https://www.ftb.ca.gov/businesses/Exempt_organizations/Types_of_Exemptions.shtml#Educational_org">https://www.ftb.ca.gov/businesses/Exempt_organizations/Types_of_Exemptions.shtml#Educational_org</a><br>
<br>
all of that said, there are plenty of examples of open-source org's
that are already IRS-recognized under IRC 501(c)(3) such as Software
in the Public Interest, Apache, Eclipse Foundation, <span
class="st">Open Source Initiative, </span><br>
<span class="st">Linux Foundation, </span><span>Software Freedom
Conservancy, and many more. i have noticed, though, what your
attorneys have related to you in that the IRS has recently seemed
to turn a blind eye to the "public benefit" clause when it comes
to open-source software. this is a trend of just a couple of years
and turns from the path they had followed for decades in granting
acceptance. if someone took the time to copy/edit one of these
org's by-laws and submitted to the IRS they would be hard-pressed
to deny based on the facts and would have to reveal a decidedly
philosophical reason which would be wide open to appeal.
naturally, i have no idea if any of this extra effort would yield
anything meaningful to openssl. certainly, qualifying for
non-profit status in CA actually grants you what you really need
and does not require any extra efforts.<br>
</span>
<pre class="moz-signature" cols="80">
--
Thank you,
Johann v. Preußen
</pre>
<div class="moz-cite-prefix">On 2016.May.11 13:00, Steve Marquess
wrote:<br>
</div>
<blockquote cite="mid:57338F79.103@openssl.com" type="cite">
<pre wrap="">On 05/11/2016 02:46 PM, Johann v. Preußen wrote:
</pre>
<blockquote type="cite">
<pre wrap="">Marquess:
your treasury re-alignment might be simplified a bit if you look to an
on-line-type bank such as Ally Bank. ...
</pre>
</blockquote>
<pre wrap="">
It's a U.S. bank. We already have multiple U.S. bank accounts.
</pre>
<blockquote type="cite">
<pre wrap="">you have mentioned server-siting and non-US personnel as control agents
as somewhat problematic. i might suggest a simple and very low-cost
means of obviating these concerns. if openssl were to incorporate as a
type IRS Reg 501(c)(3) it would satisfy US Treasury Reg's and make life
a lot easier. ...
</pre>
</blockquote>
<pre wrap="">
Yes, it would indeed, and if I had a nickel for each time I've heard
this suggestion I'd had enough beer I'd need never face sobriety again.
We have pursued 501(c) with several attorneys, all of which have advised
us that our chances of successfully obtaining 501(c)(3) or 501(c)(6)
status are nil. Apparently the IRS does not look kindly on our type of
open source project.
That is one of the reasons we need to relocate outside of U.S. jurisdiction.
-Steve M.
</pre>
</blockquote>
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