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2010 Jan 30 13:48

The following is an archive of a post made to our 'vox mailing list' by one of its subscribers.

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Re: [vox] Further LUGOD sponsorship of Atari Party 2010?
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Re: [vox] Further LUGOD sponsorship of Atari Party 2010?



All,

Apologies in advance for what will likely be a lengthy post - but I
need to explain
some regulations.

We can’t do this.
This is also not a situation where a vote (even a 100% approval vote)
of all members
would allow us to do this.
As a 501(c)(7) organization, we are subject to certain rules as
determined by the
Internal Revenue Service (IRS).

Let’s say that this is a LUGOD event. Let’s say that it brings in more than 35%
of our yearly receipts (which, it could quite easily do, we often only
collect a few
hundred dollars). By my understanding of IRS rules, we would immediately lose
our tax-exempt status, and we would no longer be a 501(c)(7).
No tax-exempt status = it’s all taxable, potentially including all the group’s
collections for the year. Even if it didn't reach 35%, it'd still
likely be considered
a fundraiser - which means tracking gross costs, net income, expenditures,
etc. - it may impact our reporting, etc.

Here’s why:
LUGOD doesn’t collect much money each year, usually just a few hundred
dollars. If more than 35% of our annual receipts come from “sources outside our
membership,” we lose our tax-exempt/501(c)(7) status. I think most reasonable
people, including myself and even Bill in his original post, noting it was very
off-topic/little tie-in, would say that the Atari party has very
little to do with LUGOD’s
stated mission of “advocating Linux and Open Source, educating the community
on these alternatives.” In addition, by Bill’s own admission, many/most of the
participants aren’t local, and they’re really not coming for a LUGOD
event, they’re
coming for Atari gaming – this is NOT part of “providing a social
network for local
Linux users” – most aren’t local, and there’s really very little true
“Linux” tie-in.



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