RE: OT: 501(c)3 certification for Oracle user groups

From: Mark W. Farnham <>
Date: Tue, 30 Jun 2015 00:44:29 -0400
Message-ID: <05b501d0b2ef$745882f0$5d0988d0$>

Congratulations to both RMOUG and NoCOUG on achieving 501(c) 3 status.  

Between 1988 (eotopica99.pdf) and an update in 1996 changes in IRS policy changed a lot. We probably do need to update our document from "will probably be denied" to something more hopeful and cite the experiences of both RMOUG and NoCOUG.  

In 1990 when I help found the OAUG both Bechtel's general council and several tax issue oriented law firms were consulted and the universal opinion at that time was that due to the Prime computer users group and Guide users group court rulings we had zero chance of success in gaining tax exempt status (tax exempt as distinct from not for profit). The IOUG received similar advice, circa 1993, if memory serves.  

The rulings and advice from law firms were not myths. Three filings and a four year perseverance required by RMOUG underscore the very real difficulties even as late as 2003.  

Tax exempt status is a desirable outcome and I know richly deserved by RMOUG, for example, not least because of their contributions to high school education.  

Once a local, regional, or sig users group achieves critical mass for the undertaking it is well worth considering. If RMOUG and NoCOUG can share what they regard as key positives of their applications from the IRS viewpoint, that would be great. The prevailing attitude at the IRS has clearly evolved from what it was in the wake of the Guide and Prime rulings.  

Again, congratulations!  


From: [] On Behalf Of Tim Gorman
Sent: Monday, June 29, 2015 9:02 PM
Subject: Re: OT: 501(c)3 certification for Oracle user groups  

RMOUG initiated efforts to obtain 501(c)3 status in late 2003, submitted three times, and achieved the status in late 2007. RMOUG was also incorporated in 1996 as a 501(c)6, but I don't believe the 501(c)3 status was backdated. So in that respect, NoCOUG is an official tax-exempt charitable non-profit since well before RMOUG. :-)


On 6/29/15 17:39, Iggy Fernandez wrote:

Following the trailblazing path set by RMOUG, NoCOUG has received 501(c)3 exemption from the IRS. The effectivity date was the date of NoCOUG incorporation in 1996. This busts the myth that Oracle user groups are not eligible for 501(c)3 exemption.

The IRS's concern is that a computer user group supporting only part of an industry provides

some members of the industry with an advantage over others not supported by the group. The

IRS will look at the group's primary purposes, activities, and membership to determine whether

the group benefits the entire industry or only a segment or a sole brand/manufacturer. Simply by

having a nametag like "Oracle User Group" will send red flags to the IRS that your group is

primarily supporting one brand or manufacturer (i.e. Oracle Corporation). If your user group can

make a case that it supports the entire software industry then you may be able to obtain tax

exemption under the 501(c) (6) rule. To obtain tax-exempt status under Section 501(c) (3), a

group must be organized exclusively for one or more of the following reasons (among others):

charitable, religious, educational, scientific, or literary. Computer user groups normally do not

qualify under Section 501(c) (3) because their purposes and activities rarely are exclusively

charitable or educational, etc. Although your main activity may be education, if it is organized to

help users of a certain brand or manufacturer, rather than the public as a whole, tax exemption

will probably be denied.  


Received on Tue Jun 30 2015 - 06:44:29 CEST

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