Mozilla frees up $15M as it settles with US taxman

The Mozilla Foundation has announced that an US Internal Revenue Service (IRS) audit that started in 2008 has now been closed and, thanks to a settlement, $15 million dollars has been freed up within Mozilla to support the Foundation's mission. Mitchell Baker, chair of the Mozilla Foundation, said the $15 million came from a reserve being held pending the resolution of the audit and that the Foundation had to pay only $1.5 million dollars to the IRS.

Baker called the resolution a "very positive result" and said she would share further details on the audit before the end of the year. The audit dates back to 2004/2005 when Mozilla's search revenues from Google began to roll in. In 2005, Mozilla spun off the Mozilla Corporation, transferred its search contracts to that organisation and set aside funds in case 2004/2005 revenues were to be reviewed.

By 2008, the IRS had begun a review of those years and in 2009, the organisation said the review now included 2006/2007. The review carried on to apparently also encompass Mozilla's tax-exempt status as it received so much of its income from the search deals. With a settlement in place and no other announcement, it appears that the Mozilla Foundation will retain its 501(c)(3) status.

(djwm)