Path: utzoo!utgpu!news-server.csri.toronto.edu!bonnie.concordia.ca!thunder.mcrcim.mcgill.edu!snorkelwacker.mit.edu!apple!usc!zaphod.mps.ohio-state.edu!casbah.acns.nwu.edu!accuvax.nwu.edu!nucsrl!telecom-request
From: cornutt@freedom.msfc.nasa.gov (David Cornutt)
Newsgroups: comp.dcom.telecom
Subject: Re: More on BBSs and Phone Rates
Message-ID: <15870@accuvax.nwu.edu>
Date: 8 Jan 91 19:27:04 GMT
Sender: news@accuvax.nwu.edu
Organization: MSFC
Lines: 56
Approved: Telecom@eecs.nwu.edu
X-Submissions-To: telecom@eecs.nwu.edu
X-Administrivia-To: telecom-request@eecs.nwu.edu
X-Telecom-Digest: Volume 11, Issue 14, Message 4 of 7


floyd@ims.alaska.edu (Floyd Davidson) writes:

[about whether a BBS qualifies as a business, and who makes the
determination...]

>2)  Seems simple enough.  Anyone required to have a business license
>    is a business.

>The telephone industry is not in the business of regulating, defining,
>or otherwise limiting other commerce or business.

There is a government agency who is: the IRS.  If you wanted to deduct
the costs of your BBS as a business expense, you would have to meet
some pretty stringent tests.  You would need, for example, a computer,
modem, phone line, and room in your house devoted *exclusively* to the
BBS, and you would need extensive documentation of your expenses and
labor.

Further, there is a nasty thing called the "three years out of five"
test that home businesses are subjected to.  Just charging for access
isn't enough; you have to demonstrate that you have turned a profit at
least three out of the last five years, or the IRS will declare your
business to be a hobby, and disallow all deductions resulting from it.

What's the point?  The point is that there is no way that any home-
operated BBS would ever meet the IRS tests for a legitimate businees
(for-profit or not).  So, in a rational world, there is no way that a
BBS could ever be charged business rates.  Whether such an argument
would cut any ice with a PUC or not, I don't know.  Has anyone ever
tried such an argument?

>[Moderator's Note: But in reference to your point 2 above, there have
>been a couple instances where communities have made, or attempted to
>make people with modems and terminals at home get 'business licenses'.
>Then what would you do?  Their thinking was people with these
>instruments at home were apparently working out of their home in a
>business-related activity.   PAT]

Having an office at home is not the same thing as running a business,
according to the IRS.  It is damn near impossible to deduct a home
office, no matter how legitimately it may be related to your job.
Again, whether this would mean anything to a PUC, I can't say.


David Cornutt, New Technology Inc., Huntsville, AL  (205) 461-6457
(cornutt@freedom.msfc.nasa.gov; some insane route applies)
"The opinions expressed herein are not necessarily those of my employer,
not necessarily mine, and probably not necessary."


[Moderator's Note: But again, neither would the dial-prayer / phone
counselors / recorded annnouncement givers of the world qualify under
the 'three out of five' rule. They pay business rates. Either there
should be a not-for-profit rate with telco *or* the BBS operators
should bite the bullet and pay the same as others of their kind.   PAT]