Re: Scenario C prerequisites (Re: Upcoming: further thoughts on where from here)

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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