SUO: Tax compliance/charitable status issues
Jim,
Though I like some of your revised phrasing of my checklist, the overall
message does neglect the crucial issues of tax compliance and charitable
status that were raised in the Procedure and Policy Committee (P&P) and
offline. Let me review them.
1. Voluntary disclosure-- All the generic questions on my checklist were
submitted, at Frank Farance's suggestion in the P&P committee, for advance
review by those to whom they may ultimately be posed (Niles, Kent, West).
No one of these three responded in advance that they objected to any of
these questions in principle. The checklist is a voluntary matter as I
have posed it. If the list is generic and has been pre-vetted by those to
whom the questions are posed, why do you and Frank insist on interposing?
I do, however, approve of and accept the more graceful wording of your
questions, provided we add a relevant one for avoiding "consortium" and
"private inurement" problems, as follows:
>
> Does this document have a volunteer Technical Editor? What is his or
> her level, nature, and duration of commitment?
> What other SUO members are currently committed to doing the work needed
> to complete this document? ADD: What is their level, nature and
duration of commitment?
ADD: To your knowledge, are any of these other members under unified
coordination for the specific purpose of their participation in SUO?
(note that this wording does not include those operating under a single
corporate logo but not coordinated for the purpose of working group
participation, whereas it does ask for disclosure of outside contractors
under unified financial coordination for the limited purpose of SUO work)
2. Costly character of locking in the "wrong" official answer
On the matter of Frank's getting an "official" statement from IEEE
prohibiting a voluntary response to items on the checklist, my friendly
advice to IEEE is to proceed with care and with legal counsel, and not to
allow the standards sub-activity (5% of its total) to endanger the
legitimate tax exemption of the larger whole. IEEE is a reputable
organization with a $200 million annual budget. I would specifically
caution IEEE to look at post-1993 case law affecting volunteer activity
that uses a charitable venue for inurement to private benefit before
locking itself into any rigid positions that may prove costly later.
3. Standards community not informed on compliance/charitable issues
Many veteran members of the IEEE standards community have not been
adequately briefed on their responsibilities in the changed environment of
a public charity. They have not even recognized that IEEE is a public
charity, and my own inquiries a year ago were seriously hampered by
following in good faith the erroneous word of IEEE veterans. Their error
is understandable in that most of the standards practices date from an
earlier period. For two decades 1973-93 IEEE operated as a business
league. In 1993 IEEE submitted a 77-page application (available by law
for immediate inspection at all IEEE branch offices) for exempt status as
a public charity. Usually this involves a 5-6 year trial period. IEEE's
argument, which was approved, relied heavily on its role as a publisher of
learned journals and as a convenor of conferences and symposia, as opposed
to its receding role as a professional and business support organization.
It represented that its standards work was a reasonable extension of its
journals publication activities, carried out (mutatis mutandis) under
well-developed procedures, and therefore exempt under an educational and
scientific rubric. Its most recent tax returns, of which the relevant
sections are also available to inspection by the general public, show that
although IEEE paid taxes on certain portions of its publications revenue,
it claimed that the entire income from standards publication ($9 million
in the most recent year available) was tax exempt.
Thus, statements from standards veterans that IEEE is a "business
setting", that "academic ethics" do not apply, that companies may choose
to "lie" about their funding of outside experts operating with apparent
independence, that "profit is the main motive for participating" etc. etc.
are evidence of a time-lag from the period 1973-93. Moreover, those
lacking a background in charitable organizations tend to exaggerate,
misread and misstate issues stemming from such a context. I do not
believe that Frank, who is now embarked on securing the long-sought
official document prohibiting requests for voluntary disclosure, is
attuned to dealing with issues of non-inurement to private persons in a
charitable setting, since it is only recently that he realized IEEE is a
charitable setting.
4. Reliance on pre-1993 procedures
IEEE has begun to examine the legal basis of its standards activity, to
the extent of moving certain work out of the charitable domain. The vast
preponderance of its standards work still is done under a charitable
rubric. It currently appears to rely wholly for validation of the
charitable status of its standards activities on ANSI rules. These rules
are well designed to assure the industrial/commercial reliability of the
ultimate standard and broad representation of relevant material interests
in the *final* standard document, and they contain a number of devices to
prevent a small rump from dominating any document that is accepted. But
ANSI rules were not designed to assure the charitable integrity of the
*process* by which the document is developed, and there is no reason to
think that they are in themselves sufficient to do so. And there is
considerable evidence in the casual talk of standards officials that the
demeanor of this activity has not yet caught up with the change in
charitable status.
4. SUO as an unusally "academic" standard
A case like the SUO which is less technical and more academic-- a clear
majority of the voting addresses are from non-profit and governmental
domains-- is certainly an appropriate one to accelerate the harmonization
by IEEE of its standards work with its post 1993 charitable status.
5. No comprehensive rule is sought
However, I have not been looking for a global remedy here, merely a few
pro forma declarations. On this iteration I have taken the very mild
course of putting a number of pre-vetted questions for voluntary
disclosure that will set the issue to rest for SUO purposes and enable
IEEE to address systemic matters at a more leisurely pace.
I am astonished, therefore, at the attempt to inveigle IEEE to make
(literally) a federal case out of it, with a global policy statement. But
I shall go along cheerfully in clarifying whatever statements are
presented, provided we have a signed locus of authority for them willing
to respond to questions. I certainly hope we are not going to get some
crude rehashing of the view that participation of working group members
*as individuals* should be interpreted to encourage abuses which in any
setting, business or charitable, are unacceptable.
6. Copyright release has a loophole in the ontology field
On the matter of patent and copyright releases, I am disappointed that you
still have not appreciated my point here, so let me repeat that the
standing copyright release procedures do not adequately cover the relevant
ground for the SUO case. They need to be adapted to the specific nature of
an upper level ontology and to the existing practice within the field. We
have already had four years of experience in this matter. Two contributors
of reference objects-- Cyc and the Japanese EDS-- disclosed at the outset
that though they were donating (merely semantic) upper level terms, they
held in reserve proprietary materials without which these contributions
would be of very limited use. If the two currently proposed candidate
documents-- SUMO and IFF-- also are encumbered with such side intellectual
property, it should be stated up-front, as this is the ethical practice
set by others in this field. Again, I have made this a voluntary issue in
a pre-vetted checklist.
I think you will find that many of us emphatically do not want to get
involved in IEEE standards work to take sides in a commercial rivalry
between firms with the same basic methodology for ontology construction,
but with rival proprietary micro-theories, algorithms and axioms.
-------------------------
Again, my thanks for your more graceful wording of my questions, which I
accept with the additions noted.
I think as a courtesy to IEEE we should forward emails bearing on the
overall tax compliance and chzritable status of the process, as we are
conducting it, with the offices of the IEEE president, standards and tax
administrator, since they will have to clean up any misjudgments that we
make at the SUO working group level. These could turn out to be quite
costly.
Lee
On Sat, 21 Jul 2001, Schoening, James R CECOM DCSC4I wrote:
>
> Lee,
>
> Most of your questions are good, but address some of the others.
>
> Question e (on source of resources) should not be asked. Frank Farance
> contacted IEEE and tells me a statement is forthcoming from IEEE to put a
> halt to requests for disclosure questions of this sort.
>
> However, why not ask something like:
>
> Does this document have a volunteer Technical Editor? What is his or
> her level, nature, and duration of commitment?
> What other SUO members are currently committed to doing the work needed
> to complete this document?
>
> Regarding encumbrances, Adam Pease from Tecknowledge has already signed and
> sent me a standard copyright release letter for this document, so we're
> fully covered here.
>
> Jim
>
>
> -----Original Message-----
> From: Josiah Lee Auspitz
> To: standard-upper-ontology@ieee.org
> Sent: 7/21/01 5:56 AM
> Subject: SUO: Generic questions for SUMO
>
>
>
>
> Ian,
>
> To lay out further some of the specifications of SUMO, here is a
> checklist of generic questions designed to assist in clarifying the
> character of any working document to be accepted into SUO.
>
> a) do you object to calling the final document that may evolve from your
> submission a reference ontology or a reference object?
>
> b) would you state clearly those conceptual and methodological features
> of
> the proposed document which are so fundamental to it as not to be open
> to
> amendment?
>
> c) what prior work has gone into the candidate ontology?
>
> d) please estimate what further work is needed to bring it to a fully
> developed reference object (or "standard");
>
> e) what future resources are available for the candidate ontology in the
> form of contracts, budgets or grants directly supporting its development
> and including the names of participants in SUO working under such
> support;
>
> f) do these future resources include the human resource of at least one
> person who has agreed to serve as technical editor;
>
> g) please disclose any proprietary encumbrances on your document: e.g.
> proprietary algorithms, axioms, methods, processes or microtheories
> essential to the effective use of the envisaged final work product.
>
> The aim of these items is to give active participants, including those
> in
> non-profit organizations, sufficient information on which to make an
> informed commitment of limited time and resources.
>
>
> Lee
>
>
>