response 1 of 48:

Feb 9 03:05 UTC 1995

As an added note I'd strongly suggest Grex's Board authorize the treasurer
to hire an accountant to file (or advise us on) necessary state and
federal tax obligations.  We probably won't owe much but should we get
into a position where there is interest or penalties the bill could become
uncomfortable.  We need professional advice on a number of these issues. 

response 3 of 48:

Feb 9 04:44 UTC 1995

Mary, if you have a copy of the letter you mailed to the IRS (that
#0 is a response to), if you'd be willing to type it in, I'd be
interested to see it.
Thanks!!

response 5 of 48:

Feb 9 17:14 UTC 1995

The "within 15 months" is concerned with the deductibility of gifts made
prior to application for 501(c)3 status. The statement in the letter about
the deductibility of dues is written with some unstated assumptions,
apparently that those services and dues are a quid-pro-quo. However on
grex, even currently, only a very small part of the available
services/uses are reserved for members, and hence only a very small part
of the dues would not be deductible. This amount would have to be
ascertained, and announced (I recall there is a lower limit, below which
all of dues are deductible - for example, a newesletter is allowed,
without reducing deductibility). 

I certainly agree that getting expert advice is better than what amateurs
and volunteers can provide, though amateurs and volunteers can accomplish
a lot (and have). 

response 7 of 48:

Feb 9 20:29 UTC 1995

Grex doesn't sell anything - except T-shirts (mugs?), and donated stuff
at JCC sales. There is a significant question as to how to value a
*small* part of internet use, out of all that is open to anyone, free.

response 9 of 48:

Feb 9 23:22 UTC 1995

I'd be happy to enter here, in this item, but when you add
both the letter of explanation and the conference discussion
excerpt, all of which was sent to the IRS, you're somewhere
around 400 lines.

To those unfamiliar with reading files here is what you type
at any OK: or RP: prompt:

   !cat /u/chelsea/irs.txt | more

response 11 of 48:

Feb 10 03:34 UTC 1995

There are a multitude of variants of 501(c)3 stuff, the M-b0x is
ruminating on their 1023 form and it's obigations. 
  
The M-b0x has also (in light of the IRS-shakes) gotten to
be a tad meaner of a place, imo.
  
We should be wary of the cons as well as the pros and *variants*
of this stuff, or is that self-evident?

response 13 of 48:

Feb 11 13:18 UTC 1995

I went to the IRS on Monday, and got the necessary forms (Form 990).  
The instructions state that organizations do not have to file if 
their income is less than $25,000/ year.  The IRS person I spoke to
there also told me that we would not have to file if our income was
less than $25,000/year.

I do plan to contact the Accounting Aid Society and get their opinion
on this matter.  I hope to have more information on what we need to
do at the board meeting.

response 15 of 48:

Feb 11 20:58 UTC 1995

re #12:  Tax exemptions are not retroactive.

response 17 of 48:

Feb 28 08:24 UTC 1995

What did the Accounting Aid Society have to say, danr?

response 19 of 48:

Mar 6 15:59 UTC 1995

  Here's an excerpt from M-Net's policy conference.  They recently
met with an attorney to discuss continuation of their 501c3 status.
I'm not implying that any of it pertains to Grex, as it addresses
issues specific to M-Net's current status and situation, but it's
an interesting read nonetheless.  Point 2 should particularly offend
Grex's sensibilities, but is probably due to their current filing
as an educational organization or something :).
 
--------------------------------------------------------------------
 
"Item 417 entered Fri, Mar  3, 1995 (11:38) by Craig A. Plesco (craig)
 ARBORNET ATTORNEY ADVICE
 
 Summary of document received from Arbornet's attorney, in regard
 to a meeting at the end of February 1995 with Craig Plesco,
 Arbornet President, and Joseph Saul, Arbornet Secretary:
 
 Point 1:
 
     The operation of Arbornet has changed since original correspondence
     with the I.R.S.  More specifically, the bylaws now reflect that we
     are operating on a membership basis, rather than a directorship basis.
     Advice for amending articles of incorporation with the State of
     Michigan and filing of these changes with the I.R.S.
 
 Point 2:
 
     The organization needs to refocus its efforts on establishing
     conferences of an educational nature and cease creating conferences
     that provide solely entertainment value.
 
 Point 3:
 
     Need to expand the current system to include more information with 
     regard to community related events.  Examples given such as 
     community bulletin board notifying Ann Arbor area residents of
     local events, perhaps AA City Council meetings, Zoning Board meetings,
     and other city commission meetings.  Perhaps direct link to 
     the mayor and city council of Ann Arbor.
 
 Point 4:
 
     Charging membership fees for services would not adversely impact 
     our tax-exempt status.  All individuals, irrespective of membership
     category or whether or not they are members, will have access to
     the educational and community related services provided.  Those
     individuals who pay membership dues are provided greater access 
     to the system without adverse impact on tax-exempt status.
 
 Point 5:
 
     Access to the Internet is not considered a part of the tax-exempt
     function.
 
 Point 6:
 
     Sales tax license will be required for the JCC type events.
 
 Point 7:
 
     A charitable solicitation license will not be required until
     we believe we will exceed $8,000 in donative income in a future
     fiscal year.  Donative income does not include membership dues,
     resale of computer equipment and sale of manuals.
     Included are individual gifts and grants.
 
 --------------------
 
 The previous is a summarization of the follow-up letter from the attorney.
 Under his advice, we will not be providing copies of our corporate
 documents to the general public, however, summaries such as the above,
 summary financial statements, and meeting minutes will be posted.
 
 In addition, from my own notes, the main points I gathered were:
 
     -  Bylaws updates need to be filed with the I.R.S.
 
     -  We should watch unrelated income sources.  In discussion,
        it was recommended that we combine the M-Net Manual with the
        Internet Guide, as the latter is questionable in relationship
        to our mandate.  T-Shirt sales have a special exemption.
 
     -  Charging fees for services does not present a problem.
        It was indicated that we could theoretically charge everyone,
        as long as our services were related to education.
 
     -  We are mandated to provide education, not charity.
        We must concentrate on this area and it should be the basis 
        for our every function.  As well, we should provide access
        to community information.
 
     -  The Internet access in and of itself does not fit into our
        business operations mandate.  It would need to be educational
        in nature, as our intent and our motivation.
 
     -  Computer conferencing should be educational.  All new conferences
        should follow suit.  Non-educational type conferences can fall off
        by attrition.  We need to have educational intent, but do not need
        to over-police the conferences and wipe out non-educational items.
        A conference which deviates largely from its educational basis
        should be reviewed on a total basis."

response 21 of 48:

Mar 6 22:08 UTC 1995

I disagree.  I think every avenue ought to be explored until:
 1. Positive results, or
 2. Confilcts with ideals, or
 3. Otherwise becomes unworkable.

In any case, the option should be explored until we are reasonably SURE 
which category it falls under.

response 23 of 48:

Mar 6 23:25 UTC 1995

I should have been more clear. I wasn't basing my opinion of 501c3 on
simply the text from Mnet. I've had dealings with other organizations in
the past who tried to get 501c3. The same thing happened. I've been against
501c3 on Grex since the day it was first brought up.