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 <i>exclusively</i> for the promotion of social welfare".<p>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.<p><a href="http://blogs.reuters.com/great-debate/2013/06/17/the-real-irs-scandal/" rel="nofollow">http://blogs.reuters.com/great-debate/2013/06/17/the-real-ir...</a>
Here is a redacted form just stating that:<p>"Open Source Software<p>These organizations are requesting either 501(c)(3) or 501(c)(6) exemption in order to collaboratively develop new software. The members of these organizations are usually the for-profit business or for-profit support technicians of the software.<p>There is no specific guidance at this point. If you see a case, elevate it to your manager."
<a href="http://democrats.waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/November%202010%20BOLO%20IRS0000001349-IRS0000001364.pdf#page=13" rel="nofollow">http://democrats.waysandmeans.house.gov/sites/democrats.ways...</a>
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.<p>No big deal.
I wonder if this was an intended consequence of cutting IRS funding or whether those doing the cutting literally didn't think about it beyond "fuck'em!".<p>And now I'm wondering which scenario is more dissapointing.
Take something as simple as Mozilla. Most of their work revolves around publishing the Firefox browser, they collect donations from Google for using Google's home page. After that it gets murky because there is another for-profit Mozilla in the background that makes its own deals for things like the Firefox Phone OS where "Free Spftware" isn't allowed.
The IRS starts caring who gets what cut of those Goohle "donations"? Who owns the offices, pays the wages, and who owns the IP? It gets extra murky when an Open Source project get SOLD and more money starts changing hands... Suddenly a "non-profit" gets its assets sold for millions of dollars... The IRS wants its TAX moment cause they got to feed Uncle Sam.<p>I think the problem they have are 2 college kid companies that start as "open source" while they build something (and its true they eat Ramen the whole time) only to sell that for millions later. The ITS doesn't like giving away tax money if they don't have to.. Especially when they could have been collecting it all along ... Big companies know this and I'm sure "help" the IRS know which kids to go after.