Internet Access (The Lack Thereof) At ITEC (was Re: regarding "just plain works" as a goal)

[Hal Duston]

On Thu, Oct 09, 2008 at 02:37:16AM -0700, Leo Mauler wrote:
> Claiming to be a nonprofit and then **using that status to ask
> for donations** is another matter entirely, may constitute fraud
> if your organization is not a recognized IRS 501(c) organization
> (legally the term "nonprofit" only applies to 501(c) organizations,
> and in a strict sense only to 501(c)(3) organizations) and requires
> considerably more paperwork (state and federal) than just "bringing
> a sign".  It may not be an outright lie, but it is bending the
> truth just enough to constitute fraud.  The organization which gave
> us the Internet access may assume some form of tax deduction for
> the "gift", since we referred to ourselves as a "nonprofit", and
> if denied said tax deduction, could conceivably sue for fraudulent
> charitable solicitations.

Actually ALL 501(c) organizations are non-profit. 501(c)(1) through
501(c)(28).  Charitable organizations are NOT the same as non-profit
organizations and are in fact a subset of them.  I.e. there are 
non-charitable non-profit organizations.  (The chamber of commercs
is a 501(c)(6) organization, and is a non-profit, non-charitable
organization) 501(c)(3) donations are tax-deductable, but donations
to other 501(c) are not.

http://www.law.cornell.edu/uscode/26/501(c).html

This is entirely moot; however, as KCLUG is not incorporated as a
not-for-profile corporation in any state, which is a prerequisite
for obtaining IRS 501(c)(3) status in the first place.

> And then there's the matter of filing the state taxes on the
> donated Internet connection, since KCLUG is not exempt from taxes

A friend bought (donated?) lunch last month.  I don't plan on reporting
that as income, nor does he plan on deducting it.  No fraud was committed
by either of us.

> on income.  Who here wants to volunteer?  The Kansas Attorney General
> would be only too happy to step in and find the person who went
> around fraudulently claiming KCLUG was a nonprofit organization
> and hold that person personally responsible, if KCLUG was
> discovered to be the disorganization that it is.  The cost of the
> Internet could be rather expensive, depending on the organization
> which "donates" it to us.

Based on the fact that we wouldn't be able to on give the donor a receipt,
(another requirement these days) I don't think there is a problem here.

> Booth electricity is agreed-to as part of the booth itself, as is
> the booth, and the booth is given "free", so it technically has no
> monetary value and thus no taxation rules apply.

The booth is donated, by the way.  Or perhaps we could get the
internet connection for "free" instead of having it "donated".

Regardless it is irrelevant, since nobody would be expecting to
receive a tax deduction for a charitable-donation when giving
things to the group.

IANAL, but my wife is on the board of a 501(c)(3) Missouri
non-for-profit corporation (2 years as chairman).

Thanks,
--
Hal