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OSI and Conservancy Announce US Tax Exemption Working Group

Software Freedom Conservancy and the Open Source Initiative are pleased to announce that they are the founding members of a working group focused on tax exemption issues for organizations in the United States.

Recent activity by the Internal Revenue Service in response to applications for tax exempt status have sparked a lot of interest and discussion amongst free and open source software communities.

OSI and Conservancy recognize that the IRS's understanding and evaluation of free and open source software can impact both new organizations created to promote the public good as charities (known as 501(c)(3) organizations after the corresponding tax code provision), as well as new organizations formed to forward a common business interest (known as 501(c)(6) organizations).

The working group will be open to equal participation from all concerned parties, and the working group will seek to recruit legal experts to participate in its processes. Aaron Williamson, partner at Tor Ekeland, will chair the group.

We've been watching this issue for some time and look forward to pooling our resources with other organizations and companies, said Karen Sandler, Executive Director of Software Freedom Conservancy. Together we can come to a better understanding of the IRS's perspective and plan strategically to communicate the value and importance of the corporate forms we choose.

Over the years, applying for 501(c)(3) or (c)(6) status has become the de facto standard for new FLOSS projects in the US, said Allison Randal, Director of the Open Source Initiative. It's not clear yet whether recent responses from the IRS are isolated special cases or represent a more general trend, but it is worthwhile to look into the topic more deeply, and ensure we have a strong and diverse set of healthy growth patterns for FLOSS projects, to last decades into the future.

Those interested in getting involved with this working group should contact Allison Randal at <allison@opensource.org>.