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Is the Cupertino Alliance ready for 501(c)(7) non-profit status?

Whilst Tyler Mullin’s government is near the end of its term, Mullins recently introduced a rather ambitious plan- to register the Cupertino Alliance for 501(c)(7) non-profit status. The plan, formally called the Nonprofit Act, was tabled in the 165th session of Parliament. Under this plan, the Cupertino Alliance will register under the laws of the State of Georgia in the United States as a 501(c)(7) non-profit. This will allow the alliance to gain benefits including discounts for projects like GreenCities and Micronear, as well as tax-exempt status and credibility towards the alliance. Registration costs include $100 registration as well as $30 per year, which will be covered by Tyler Mullins.

The plan, if conducted, would mean that the alliance would be one of, if not the first micronational organization formally registered as a non-profit, as well as one of the few entities in the community that are incorporated. Another incorporated entity is also Tyler Mullins’ nation, New Athens, which is registered as a limited liability company in the State of Georgia.

While New Athens is a sovereign micronation, as the King and a citizen of the US, I am still personally responsible pay taxes on any financial gains made to the treasury. However, like Molossia, we prefer to call it “foreign aid.” Having an LLC allows me to deduct a percentage of New Athens expenses on my tax returns. The other benefit is that it does protect myself, the members of my government and my citizens from being sued for anything New Athens-related, though I hope and doubt it would ever happen. It also allows anyone that I might employ in the future to be able to properly report income they receive to their macronation.

Tyler Mulins

However, Mullins isn’t planning to register the Cupertino Alliance under an LLC- rather as a 501(c)(7) non-profit.

So, what exactly is a 501(c)(7) non-profit?

26 U.S. Code outlines taxation law in the United States and includes 501(c)(7).

Defined by 26 U.S. Code § 501, it is an organization that is exempt from taxation which follows these terms:

Clubs organized for pleasure, recreation, and other nonprofitable purposes, substantially all of the activities of which are for such purposes and no part of the net earnings of which inures to the benefit of any private shareholder.

26 U.S. Code § 501(c)(7)

It differs from other 501(c) designations, including 501(c)(3) (public charities) and 501(c)(5) (labour organizations). 501(c)(7) is the best fit for the Cupertino Alliance since the alliance has a limited membership, while most of its members do not collect a paycheque (i.e. doing this for-profit) and are doing this recreationally. However, a downside is that the organization will be required to report financial reports to the IRS, and this is where §3 2. of the Nonprofit Act, 2022 comes in.

This section aims to introduce the position of the treasurer, which will be nominated by the Superior Court and approved by the Chair. Its rules will not follow the usual rules bound by Ministers- rather it’ll work akin to the Safeguarding Officer. They will be required to be a full delegate, as well as be suitable to operate and be over the age of 18. Under this plan, the treasurer will report to the IRS annually as well as report to Parliament with finance reports in January, April, July, and October. The role will also be under the judiciary.

Mullins has nominated himself under this position, touting his previous experiences in non-profits and LLC in a cover letter.

Opposition question usefulness, board of director requirements, preference towards Georgia

MicroNear, developed by the Berry Empire and owned by the Cupertino Alliance, is only available on the Google Play store due to Apple’s development fee. Non-profit status will allow MicroNear to be on the App Store.

When the plan was introduced to Parliament, it received mixed reviews. Its supporters include Redberry of the Berry Empire and T. Landa of Aarland, the former being the developer of the CA-owned Micronear. Filing for non-profit status allows the app to have a presence in the App Store- a large obstacle due to its high cost. The non-profit status allows the CA to release Micronear for free, as well as other apps to come. Others commented on the monetary benefits, including USPS discounts for the Noted project and discounts on .org domains.

The opposition was vocal about their objection to the plan. Sertor Valentinus of West Sayville commented that it was a “white elephant”, doubting its usefulness and would rather support directing the money and time towards projects instead of a fancy label.

Liam Munroe, writing for the Imperial Atieran Broadcasting Corporation, also thought that the act would defy the entire point of micronationalism, as it’ll be an “act of submission towards the US”. Others questioned if the Cupertino Alliance would be based in Georgia, moving from its ceremonial capital of Toronto, Ontario.

Critics also note the timing of the bill- right between a transition of power. Mullins notes that he does not expect the act to be voted in his administration, and plans to re-propose the second section of the act as separate legislation after more debate.

The timing was certainly imperfect, though the duties associated with this act fall to the Treasurer. It was my expectation that the last week of my term would be spent accepting nominations for the position, then the new chair along with the [Superior Judge] would confirm the nomination of their choosing and the work would begin.

Tyler Mullins
Logo of the planned MicroWiki Foundation. Interestingly, I got approached by the MicroWiki administration to create a logo for it back in June 2021, and this was selected.

However, one of the most vocal opponents to the plan is Cameron of Atiera. He compared it to the ill-fated MicroWiki Foundation, a plan akin to Mullins’ plan, turning MicroWiki into a non-profit. Cameron noted various issues to registering a non-profit, notably:

…making us an NPO (non-profit organization) just to serve the purpose of seeming professional and to be credible is entirely pointless-the benefits are heavily outweighed by the disbenefits, and I don’t personally think it is the correct move to take within an organization. I have always maintained this position since the MicroWiki Foundation.

Cameron of Atiera

Mullins rebuts Cameron’s points, pointing out that “a nonprofit doesn’t have to register internationally to operate on a global basis”, only required if it wants to be exempt from taxes in that particular country. He also suggested moving the and domains to a .org domain. Mullins also notes how he plans to include a section detailing the establishment of a Board of Directors. The board does not have any official power in the CA but Mullins plans to include the treasurer, Safeguarding Officer, and a member of the Superior Court. However, he all noted that it all depends on if they meet the requirements to be on the board.

Finally, Mullins noted that the CA can provide some resources to the public, noting that projects like the Cupertino Guide do not make up much of the Cupertino Alliance’s program lineup. He also notes that this requirement only comes up if we wish to apply for tax-exempt status, which is unlikely for the CA.

According to the IRS, we can provide public services, but this practice must be minimized to ensure that “substantially all of the activities” of the club are advancing the club’s purpose for members. CupertinoGuides is such a small part of our overall set of programs and benefits that it would be fine. [That] only comes into play if we apply for tax-exempt status, which is a separate, optional step which we would take after becoming a 501c7. Given the likelihood that we won’t be taking in thousands of dollars in donations, taxes might not even be an issue that warrants us filing for tax-exemption.

Tyler Mullins

The Nonprofit Act has large implications for the alliance and the community as a whole. This pioneering plan requires time, research, and planning to ensure that it is effective. If it succeeds, it can enrich the alliance- however, is it worth the cost and time to execute?

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