Mozilla to settle US tax affair for $1.5 million

The confrontation between Mozilla Foundation and the USA government’s Internal Revenue Service (IRS) will soon end with a settlement: Mitchell Baker, chair of the Firefox and Thunderbird organization, announced on her blog that the agreement with the federal tax agency will cost 1.5 million dollars.

The open source foundation came under the scrutiny of the IRS in 2008, after Mozilla decided that the huge funding collected thanks to its partnership with Google (66 million dollars on 77 millions overall) were royalty contributions and hence non-taxable.

In 2007 the foundation reserved 15 million dollars as well, just in case the federal tax agents came and started questioning around about the tax exemption status held by the organization. Now that the settlement will cost just 10% of that sum, Baker said, the rest of the money will be used to sustain “the Mozilla Foundation’s mission to support innovation and opportunity on the web”.

“I believe this to be a very positive result – the chairman stated – we will now go back through the various documents and will have more details on this audit to share in the future. I expect to do so before the end of this year”.

Via: The Register
Source: Mitchell Baker’s blog

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9 Comments

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I find it laughable that mozilla gets taxed in the US when it doesn't even sell anything yet over in the UK we've got a bunch of American companies paying 0% tax whilst making hefty profits - great job...

n_K said,
I find it laughable that mozilla gets taxed in the US when it doesn't even sell anything yet over in the UK we've got a bunch of American companies paying 0% tax whilst making hefty profits - great job...

Google doesn't sell much either, yet they pay taxes too. You act like selling advertising space should be untaxable...

n_K said,
I find it laughable that mozilla gets taxed in the US when it doesn't even sell anything yet over in the UK we've got a bunch of American companies paying 0% tax whilst making hefty profits - great job...

In the end, companies don't pay taxes. The people who purchase their products and services do. Companies aren't magical ponies that just manufacture money for the government to walk up and take...

rfirth said,

Google doesn't sell much either, yet they pay taxes too. You act like selling advertising space should be untaxable...


No, I'm saying it's pathetic that companies with $66m get targeted rather than companies making billions per year, doesn't amazon still avoid tax in most states in the US? I remember years ago they did and they make more in a year than mozilla will make in 10 years.

IRS comes after income, not sales tax. Amazon avoids sales tax, but now they are embracing it in some areas, like California.

n_K said,

No, I'm saying it's pathetic that companies with $66m get targeted rather than companies making billions per year, doesn't amazon still avoid tax in most states in the US? I remember years ago they did and they make more in a year than mozilla will make in 10 years.

n_K said,
I find it laughable that mozilla gets taxed in the US when it doesn't even sell anything yet over in the UK we've got a bunch of American companies paying 0% tax whilst making hefty profits - great job...

They're going to be taxed as long as they earn income/revenue.
They're not obligated to pay income tax when they have no income.

Just as simple as that...