Free at Last: We Earn Our 501(c)(3) Tax Exempt Status
I am pleased to announce to our readers that the IRS has granted our 7-year old organization full unbridled tax exempt status under section 501(c)(3) of the Internal Revenue Code as a public charity. This brings to a close an application review that consumed over 6 years—one of the longest for a public benefits non-profit organization. Our Chief Development Officer, Gregory Miller has already offered his insight this morning, but I want to offer a couple of thoughts from my view point (which I know he shares). By now, you may have seen the WIRED Magazine article that was published this morning. Others here will surely offer some additional comment of their own in separate posts. But it does set the context for my brief remarks here.
First, to be sure, this is a milestone in our existence because the Foundation’s fund raising efforts and corresponding work on behalf of elections officials and their jurisdictions nationwide has been largely on hold since we filed our original IRS Form 1023 application back in February 2007.
The Foundation has managed to remain active through what self-funding we could afford, and through generous grants from individuals and collaborating organizations that continued to support the “TrustTheVote™ Project” despite our "pending" status.
A heartfelt "thank you" to Mitch Kapor, Heather Smith and Rock the Vote, Alec Totic, Matt Mullenweg, Pito Salas, the Gregory Miller family and the E. John Sebes family (to name a few of the those who so believed in us early on to offer their generous support). The same thanks goes to those who wished to remain anonymous in their support.
In addition to our being set free to move full speed ahead on our charter, I think this is interesting news for another reason: this project, which has a clear charitable cause with a compelling public benefit, was caught up in an IRS review perhaps mostly for having the wrong words in its corporate name.
Our case became entangled in the so-called “Bolo-Gate” scandal at the IRS Exempt Division. And we unintentionally became a poster child for be-on-the-lookout reviews as such applied to entities involved in open source technology.
In sum and substance, our case required 6 years and 4 months for the IRS to decide. The Service ultimately dragged us into our final administrative remedy, the "conference-of-right" we participated in last November, following their "intent to deny" letter in March of last year. Then it took the IRS another 220 days to finally decide the case, albeit in our favor, but not before we had a] filed close to 260 pages of interrogatory responses, of which 182 were under affidavits; b] developed nearly 1,600 pages of total content; and c] ran up a total bill for legal and accounting fees over those years in excess of $100,000.
We’ve definitely learned some things about how to handle a tax exempt application process for an organization trying to provide public benefit in the form of software technology, although frankly, we have no intentions or interest in ever preparing another.
But there is a story yet to be told about what it took for us to achieve our 501(c)(3) standing—a status that every single attorney, CPA, or tax expert who reviewed our case over the years believed we deserved. That noted, we are very grateful to our outside tax counsel team at Caplin Drysdale led by Marc Owen, who helped us press our case.
I am also deeply relieved that we need not raise a legal defense fund, but instead can finally start turning dollars towards the real mission: developing accurate, transparent, verifiable, and more secure elections technology for public benefit rather than commercial gain. Its not lost on us, nor should it be on you, how we could've spent the money we need to pay to our lawyers and accountants on advancing the substantive cause of the TrustTheVote Project.
So, now its time to focus ahead, get to work, and raise awareness of the TrustTheVote Project and the improvements it can bring to public elections.
We're a legitimate legally recognized 501(c)(3) tax exempt public benefits corporation. And with that you will begin to see marked changes in our web sites, our activities. Stay tuned. We're still happily reeling a bit from the result, but wrapping our heads around what we need to do now that we have the designation we fought for 6 years to have in order to fund the work our beneficiaries -- elections jurisdictions nationwide -- so deserve.
Please join me in acknowledging this major step and consider supporting our work going forward. After all, now it really can be tax deductible (see your accountant and lawyer for details).
Best Regards, Christine M. Santoro Secretary, General Counsel