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

From: John C Klensin <[email-masked]>
Date: Wed, 22 Sep 2004 10:45:15 -0400

--On Wednesday, 22 September, 2004 05:59 +0200 Harald Tveit
Alvestrand <[email-masked]> wrote:

>...
>> re: 3/ Of course, there can be no assurance that a
>> corporation will be tax exempt unless 1/ it already is, or 2/
>> the IRS rules that it is. Scenario O covers the 1st case
>> since the ISOC is already tax exempt. The only way to be sure
>> in Scenario C is to wait until the IRS acts and that could be
>> many months.  If the 3rd item is truly a prerequisite then,
>> even if we incorporated the IASF (not a name that rolls of the
>> tongue) next week the IRS might not rule until next summer.
> 
> Being a bit facetious here, the only way to be sure the sun
> will rise in the morning is to wait for it to show up.
> If we get an organizational charter that a tax attorney is
> willing to assure us "is likely to be accepted as a
> nonprofit", I (personally) think that the risk of the IRS
> acting irrationally is an acceptable risk, if we find that the
> scenario C solution is the one we want.

Harald,

I hope things are better in Norway and assume that they probably
are.  But the IRS does make decisions that are irrational or,
perhaps more accurately, reflect a version of reality that are
not always predictable even to experienced tax attorneys.  And
many of the rules require that one must presume and act as if
they will rule against you until they actually rule for you -- a
presumption of "acceptable risk" is, under some circumstances,
actually illegal.  The alternatives are, at best, really
impressive penalties.

The experience with ability to predict the rise of the sun has
been much better empirically, and also derives from principles
of physics that further strengthen the probabilities.

       john

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