Open Source Projects Aren't Tax Scams

Simon Phipps | InfoWorld | June 28, 2013

IRS is eyeing open source projects and Tea Party groups as possible tax scams, raising a real question: Do open source foundations need nonprofit status?

Why does the IRS think open source projects are like Tea Party chapters? Recently released IRS papers show the agency has been flagging and obstructing applications for nonprofit status by open source communities -- since as far back as 2010 and probably earlier.

Think of an open source project: Firefox, LibreOffice, Apache HTTPD, Eclipse. All are projects hosted by nonprofit organizations. Many of them have the word "foundation" in their name -- Mozilla Foundation, Document Foundation, Apache Software Foundation -- so many people collectively call them "foundations." There are now so many of them that the informal mailing list their leaders use to discuss matters of mutual interest, called the FLOSS (free/libre and open source software) Foundations List, now numbers hundreds of people.

Why do we have foundations? Simply because they are the best way for a community of open source developers, deployers, and users to organize themselves in a way that optimizes everyone's mutual benefit. When a single interested party has the controls, the interests of smaller participants are subjugated. But when a community is run as an uncoordinated free-for-all, the stringent needs for traceable copyright and patent defenses that corporations have go unmet. [...]