On Wed, 22 Sep 2004, Jeffrey Hutzelman wrote:
I think this and a number of other points made here gloss over a key point of
which some of the participants may not be aware.
Under US law, there is a significant difference between "not-for-profit" and
"charitable nonprofit"....
It might be useful to add more precision.
In the US there are two levels from which laws affecting corporations
arise, state and Federal. Corporate structures are usually created under
state law.
Many states of the US have laws that allow "non-profit" or even
"charitable nonprofit". Here in California, for example, there are
several forms of non-profit: public-benefit, charitable, mutual benefit,
religious, medical, etc.
And here in the US we have a lot of states - 50 of 'em - each with its own
different corporations laws.
At the federal level there is yet another mountain of law, but we often
end up talking about tax exemptions under Title 26 Section 501 of the US
code. That part of the tax code covers a lot of territory and is very
complicated and full of subtle distinctions that trigger significant
differences in treatment as well as imposing rather different kinds of
limitations and obligations upon the entity that is seeking or obtained
one or another of these exemptions.
So, when talking about these things we can avoid a lot of confusion if we
try to be precise about specific state level conceptions of corporations
and non-profitness and federal level conceptions of federal tax exemption
and the benefits, limitations, and obligations that come from each.
I might add that one of the questions that ought to be raised, and it is a
question that I'm certainly neither qualified to answer nor will I even
attempt to answer, is whether the IETF ought to seek Federal tax exempt
status at all. Sometimes it may be better to simply file the papers, pay
the tax money, and be free of many of the restrictions.
--karl--
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