Feds Punish Companies That Don’t Use Federal Copyright

by Stephan Kinsella on July 12, 2014

As discussed in the most recent This Week in Law, the IRS has issued a ruling that makes it more difficult for open-source software groups to claim non-profit status—because if you develop and release software using an open-source license, then, you know, other people might use it for commercial or other purposes. As one of the posts about this (IRS policy that targeted political groups also aimed at open source projects) summarizes:

… We’re all familiar with the ongoing controversy of the IRS targeting of non-profit organizations that are (potentially) affiliated with a political movement – most notably conservative ones. But one thing that has, until now, simply not gotten enough attention is the IRS targeting of Open Source non-profit organizations.

That’s right. The IRS has, in essence, waged war against not-for-profit groups that make Free and Open Source software.

This week, it was announced that the IRS has officially denied Yorba‘s – an organization that focuses on Free Software such as Shotwell and Geary – request to be a 501(c)(3) non-profit. (You can read the full text of from the IRS here.) This could possibly be a one-time, specific case, one that may not even have any relevance to other organizations.

But the wording that the IRS chose to use in denying their status is deeply troubling.

“You have a substantial nonexempt purpose because you develop software published under open source compatible licenses that authorize use by any person for any purpose, including nonexempt purposes such as commercial, recreational, or personal purposes, including campaign intervention and lobbying.”

So not only does the fedgov foist copyright on people automatically; not only does it make it almost impossible to get rid of it (Copyright is very sticky!); but, now, if you try not to use copyright, e.g. as the open source software movement has very successfully done, the feds will punish you by imposing more taxes on you.

It’s almost as if … they really, really want you to use their copyright system, and become more dependent on it. Hunh.