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Grex > Coop11 > #10: Grex Granted Tax-Exempt Status |  |
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| 25 new of 127 responses total. |
rcurl
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response 87 of 127:
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Jul 27 07:18 UTC 1998 |
The main difficulty that can come up with a grant is that somehow you
were given one, but are not set up administratively to accomplish the task
for which it was given. One keeps reading about situations like this in
Detroit. What should be done is to return the grant, but this is tough
if you've already set up the system to use it, even imperfectly.
My main point is that the word "grant" does not necessarily mean "doom".
Quite the opposite, in fact, in most cases. Granting agencies are probably
even more careful than most applicants in ascertaining that the applicant
really is qualified to exercise the grant.
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janc
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response 88 of 127:
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Jul 27 19:08 UTC 1998 |
Re resp:66, Re resp:49:
I don't think there are two different dates. Here's a quote from
IRS Publication 557:
EFFECTIVE DATE OF EXEMPTION
A ruling or determination letter recognizing exemption is
EFFECTIVE AS OF THE DATE OF FORMATION OF AN ORGANIZATION
if, during the period before the date of the ruling or
determination letter, its purposes and activities were
those required by law [deleted reference to section of manual
which tells what the law requires]. Upon obtaining recognition
of exemption, the organization may file a claim for a refund
of income taxes paid for the period for which its exempt status
is recognized.
If an organization is required to alter its activities or
substantially amend its charter to qualify, the ruling or
determination letter recognizing exemption will be EFFECTIVE
AS OF THE DATE SPECIFIED IN THE LETTER. If a nonsubstantial
amendment is made, such as correction of a clerical error in
the enabling instrument or the addition of a dissolution clause,
exemption will ordinarily be recognized as of the date of formation
if the activities of the organization before the ruling or
determination are consistent with the exemption requirements.
A ruling or determination letter recognizing exemption MAY NOT
BE RELIED UPON IF there is a material change, inconsistant with
exemption, in the character, the purpose, or the method of
operation of the organization.
This is pretty clear that the default and normal situation is that
recognition is retroactive to the founding of the corporation. It is
also clear that if there was some other date, it would be mentioned in
the letter. It explicitly says that our right not to pay federal taxes
goes back retroactively and that we could ask for anything we paid to be
returned. It does not explicitly mention the deductability of
donations, but I've never seen anything to suggest that not paying taxes
and deductability of donations are seperable.
Once again, non-retroactive status is not the default. If you are
applying for that, you have to specificly request it by checking the
"yes" box on line 6 of part III of the application form. We did not
check that box.
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davel
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response 89 of 127:
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Jul 27 23:02 UTC 1998 |
(It's the default if you have to make changes in order to gain 501(c)3 status,
if I understand that. And that might be the normal case.)
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tpryan
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response 90 of 127:
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Jul 28 01:18 UTC 1998 |
So at least, all of 1998 can be called a tax-exempt year?
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janc
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response 91 of 127:
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Jul 28 12:46 UTC 1998 |
Yes. For most people that's going to be the relevant fact.
But I'm convinced that every year since Grex's founding has been a
tax-exempt year.
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rcurl
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response 92 of 127:
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Jul 28 18:30 UTC 1998 |
So, everyone, file amended tax returns for all those years.....
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aaron
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response 93 of 127:
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Jul 28 22:42 UTC 1998 |
re #88: You are again dealing with a separate issue -- the corporation's
tax liability. Call the IRS -- they'll clear up the issue.
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janc
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response 94 of 127:
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Aug 1 01:09 UTC 1998 |
In everything I've read (which is a lot), I have never seen any hint
that these two issues are separate under any circumstances at all. If
there were any situation in which an organization didn't have to pay
taxes, but people donating money to it did, then I think that would be a
significant enough thing so that the IRS would have made some mention of
it in one of their publications. My understanding is that the "two
issues" are one and the same.
You're going to have to present at least a thread of evidence to support
your contention before I start believing that this is an issue that
needs clearing up. It seems perfectly clear to me.
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aaron
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response 95 of 127:
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Aug 1 23:59 UTC 1998 |
Jan, it is *typical* for the IRS to set an effective date for the
deductibility of charitable contributions. I have never heard of any
organization where years and years of past contributions were allowed
to be retroactively deducted, whatever the status of the organization's
tax liabilities. Perhaps you can name one?
The problem here, Jan, appears to be that you are afraid that I am
correct.
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keesan
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response 96 of 127:
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Aug 2 00:10 UTC 1998 |
I think you can only redo your taxes for the past three years anyway.
Aaron, I would appreciate if you could phrase your questions and comments less
aggressively. Maybe you could use phrases like "I think" or "in my opinion"
instead of "The problem appears to be". That is your opinion. Your style
of expressions is probably normal for court appearances, but people in grex
are attempting to work together, not against each other.
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aaron
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response 97 of 127:
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Aug 2 01:13 UTC 1998 |
This response has been erased.
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aaron
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response 98 of 127:
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Aug 2 01:17 UTC 1998 |
Perhaps the problem was the obnoxious way Jan phrased his last paragraph.
I am not responsible for the fact that there are people on this system
who view any challenge to the status quo, no matter how reasoned, as
hostility. If you think Jan's last paragraph was an effort at consensus
building, I suggest you examine your own prejudices before challenging
my presentation.
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keesan
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response 99 of 127:
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Aug 2 15:42 UTC 1998 |
If I were in Jan's place, I would have stopped responding to your 'challenges'
long ago. You are pushing people's patience to the limit. I think it has
a lot to do with your writing style and choice of vocabulary, which are often
intended to provoke. I am attempting to analyze the problem from the
viewpoint of a linguist, not a psychologist. How about "I found the phrasing
of Jan's last paragraph upsetting"? That way Jan would not feel that you were
attacking him personally, and might continue to attempt to respond to the
facts of your argument rather than the emotions.
Anyone else want to have a go at this?
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aaron
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response 100 of 127:
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Aug 2 21:06 UTC 1998 |
I am pushing people's patience to the limit? How? By suggesting that they
check to see that the gun is not loaded before playing Russian Roulette
with the IRS? I don't see that I was asking a whole lot, in suggesting
that somebody make a simple phone call to clarify the issue.
I don't get upset by Jan's comments -- Jan, most of the time, is one of
my favorite on-line personalties, whether or not I agree with him. If you
are getting upset about this discussion, the problem is not with Jan's
comments or with mine. The problem is that you lack perspective.
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aruba
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response 101 of 127:
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Aug 2 21:40 UTC 1998 |
I wish I knew who to call to get definitive answers to our tax questions. I
am afraid that what Rane said may be right: if we call the IRS we may get a
telephone operator who doesn't have the knowledge or authority to give out
authoritative answers. My current plan is to ask the Accounting Aid Society
our questions, as soon as they have received our membership dues. (Which
should be any day now.)
Could you recap for me, Aaron, what you think we should call the IRS about?
I'm afraid I have lost the thread of the conversation.
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janc
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response 102 of 127:
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Aug 4 00:18 UTC 1998 |
I don't think there is anything "offensive" about the last sentence of
my resp:94. You have a theory. I have a different theory. You claim
that the burden of resolving the difference falls on me. That I should
go out and do a lot of research. Why should I do that? I'm a busy
person. I have to decide if I'm going to research tax law for Grex,
process the 500 message backlog in my staff mail, work on Backtalk, or
maybe do some paying work. I have to prioritize things. How much
priority I give to researching this issue depends on how worried I am
about it, and how much good I think it will do. So far, nothing you've
said has convinced me to worry very hard, and since I don't really
understand the position you are taking, any research I do to try to
prove or disprove it is likely to prove worthless anyway.
I'm not "afraid to be proved wrong". I have lots of experience with
being wrong, and if you do prove me wrong, I'll deploy my tried and true
strategy for such cases - I'll change my mind and henceforth be correct.
You aren't pushing my patience. I'll be happy to respond to anything.
If I find it convincing, I'll be convinced. So far the few sentences
you've entered supporting your case have not overwhelmed my own
opinions, but you needn't take that as condemnation - it's not as if
you've actually presented your argument yet.
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tpryan
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response 103 of 127:
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Aug 4 00:29 UTC 1998 |
janc, can you also put on your back burner the guide paper
on 'how to respond to aaron'? It needs to be posted on M-net.
Thank You.
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i
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response 104 of 127:
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Aug 4 01:26 UTC 1998 |
<chuckle>
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keesan
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response 105 of 127:
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Aug 4 18:17 UTC 1998 |
I have never found anything Jan wrote offensive to anyone, and don't see how
anyone could have read anything offensive into it. And I admire how patiently
he has managed to deal with all sorts of questions.
.
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arthurp
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response 106 of 127:
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Aug 4 23:20 UTC 1998 |
Then there is that nagging issue about how we filled out the application
to be retroactive to the beginning of time. (Cyberspace Communications
Inc, time). And that other nagging fact that the IRS accepted our
application without ammendment or comment. These seem to be big red
letters screaming from the wall that this argument is pointless. Maybe
some loud voice in this item should calm down and think about the info
we have before demanding we run all over the planet getting more info.
This all came out more inflammatory than I intended, but I've been
pretty inflammed.
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mdw
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response 107 of 127:
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Aug 5 00:56 UTC 1998 |
Definitely don't depend on the IRS for right answers, especially via the
telephone. They've a proven track record of handing out terrible
advice.
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janc
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response 108 of 127:
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Aug 5 01:15 UTC 1998 |
Re resp:106 - Actually Aaron has acknowledged those facts, and that Grex
has the retroactive right not to have paid taxes.
His claim is that the same may not apply to the right of other people to
deduct their donations to Grex from their taxes. Every proof I've seen
of the retroactive status refers only to our "tax-exempt status" and
does not explicitly mention "deductability of donations," so Aaron's
claim is not directly defeated by any of it. However, I've always
assumed that having tax-exempt status implies absolutely that donations
are deductable (within the usual limits), and I have never seen anything
to indicate otherwise except Aaron's bald statement to the effect. I
feel that if something that important isn't mentioned in all the
publications I've read, then it is either because the IRS has been
seriously remiss, or because it doesn't exist. I believe the latter,
but cannot absolutely deny the possibility of the former. It would take
more research to prove one or the other of us right.
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aaron
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response 109 of 127:
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Aug 5 03:26 UTC 1998 |
The response from the IRS to a general inquiry was to refer me to page
13 of Publication 557, which indicates that ordinarily, if an organization
applies for an exemption more than fifteen months after its creation,
the exemption is effective retroactive to the mailing date of the
application. I have not seen anything to the contrary, outside of Jan's
bald statements. I would want to reveiw all of the relevant documentation,
and perhaps to make a specific inquiry with the IRS, before declaring that
the standard rule does or does not apply in the present circumstance.
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cmcgee
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response 110 of 127:
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Aug 6 07:16 UTC 1998 |
Aaron, if you want to retroactively deduct your donations to Grex, you should
consult your tax advisor. Grex staff is not in the position to provide any
more information than they have about what the papers we received from the
IRS say. Apparently they allow people like you to deduct their donations
back to the beginning of Grex. I'm sure anyone for whom this is a serious
question has a tax advisor that they can trust to advise them in light of
their own financial situation.
For those of us who are not seriously considering redoing our tax returns,
it is a waste of staff time to continue asking for information that we have
no intention of making use of.
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mta
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response 111 of 127:
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Aug 11 22:18 UTC 1998 |
Consulting a tax advisor is a far better move than consulting the IRS directly
anyway. As Marcus said above, the IRS has aterrible track record with the
advice they give over the phone and they refuse to be held to it in case of
dispute.
That being the case, a tax advisor can at least back up the advice with
specific reasons and represent us in case of dispute.
Then again, as Colleen says, why chase down information we don't need...?
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