On 1/2/06, Sam Korn <smoddy(a)gmail.com> wrote:
On 1/2/06, Anthony DiPierro
<wikilegal(a)inbox.org> wrote:
"I can't imagine Mediawiki would even
consider something which would
endanger its not-for-profit status so I doubt this is a problem." The
thing is, I doubt very many people are aware of all the intricacies of
US non-profit tax laws. Most people don't know what UBTI even is.
Why would WMF worry about not being not-for-profit if it were getting
all its money from ads? Is there some other benefit apart from being
tax-exempt? If the net financial gain would still be an increase in
income, the paying tax seems irrelevant.
Or have I missed something crucial? (Note that I am British and take
pride in knowing very little of the intricacies of US law.)
--
Sam
The excise taxes on running a non-profit organization as a for-profit
corporation go up to 200% if you don't eventually correct the
situation. Yes, 200%, that means if you make $100 in net profits you
owe $200 in taxes. You're much better off dissolving the non-profit
and forming a for-profit corporation than running a non-profit as a
for-profit :).
Of course in reality what would happen far before any of that took
place is that the WMF could form a for-profit company which would pay
taxes and would be owned by the non-profit. That's how the IRS wants
you to do things, in essence it's how they force you to do things.
Anthony