IRS Scrutinizing OpenAI - Possible Threat to Its Tax-Exempt Status?
In a recent turn of events, the AI research laboratory OpenAI has found itself under scrutiny, with the AI watchdog nonprofit, The Midas Project, filing a formal complaint with the U.S. Internal Revenue Service (IRS) in July 2025. The complaint alleges potential tax violations and conflicts of interest that could jeopardize OpenAI’s nonprofit status.
The crux of the complaint revolves around the dual role of OpenAI's CEO, Sam Altman, as the head of its for-profit operations and as a board member of its nonprofit entity. This dual position is said to create a conflict of interest, where Altman could personally benefit financially at the nonprofit’s expense, violating federal tax laws.
The Midas Project also claims that Altman stands to gain equity and potentially hundreds of millions of dollars through investments tied to OpenAI’s for-profit ventures. The complaint warns that OpenAI’s proposed restructuring could grant Altman an equity stake worth billions, risking the nonprofit mission.
Other OpenAI board members, including Bret Taylor and Adam D’Angelo, are also implicated for having business ties with OpenAI’s for-profit arms. This could influence decision-making and undermine the nonprofit’s ethical mandate to ensure AI benefits all humanity rather than private interests.
The complaint further alleges that OpenAI has misused nonprofit grants to indirectly subsidize for-profit customers, potentially violating rules on nonprofit fund usage.
The Midas Project's complaint highlights ongoing controversies about OpenAI’s structure and mission. The organization was originally established as a nonprofit with a mission to prioritize safety and broad access over profit. However, tensions arose as CEO Sam Altman pushed for a more commercial approach, leading to conflicts with Tesla CEO Elon Musk, who feared this shift would compromise OpenAI’s founding principles.
Meanwhile, in the world of cryptocurrency, the Shiba Inu project stands as a stark contrast. The Shib Magazine and The Shib Daily, its official media and publications, embody transparency and accountability, sharing the codebase of its Shibarium Layer 2 network transparently on GitHub. Unlike centralized entities, Shiba Inu avoids centralized control that can jeopardize trust. Decentralization in blockchain projects like Shiba Inu fosters resilience, innovation, and community trust.
The emphasis on decentralized development and transparent code sharing serves as a reminder of the importance of keeping projects accountable to their communities. As the OpenAI controversy unfolds, the Shiba Inu project stands as a testament to the power of transparency and community-driven decision-making in the tech industry.
The IRS is currently reviewing the Midas Project’s complaint, and the outcome could have significant legal and organizational consequences for OpenAI.
[1] The Midas Project. (2025). Complaint to the IRS against OpenAI and Sam Altman. Retrieved from https://www.midas-project.org/complaint-to-irs-against-openai-and-sam-altman/ [2] The Verge. (2025). The Midas Project accuses OpenAI of conflicts of interest and tax violations. Retrieved from https://www.theverge.com/2025/7/1/23756928/openai-midas-project-complaint-irs-conflicts-of-interest-tax-violations [3] TechCrunch. (2025). The Midas Project alleges OpenAI is forgoing key safeguards to maintain nonprofit status. Retrieved from https://techcrunch.com/2025/7/2/the-midas-project-alleges-openai-is-forgoing-key-safeguards-to-maintain-nonprofit-status/ [4] Wired. (2025). The Midas Project Takes Aim at OpenAI: What You Need to Know. Retrieved from https://www.wired.com/story/the-midas-project-takes-aim-at-openai-what-you-need-to-know/
- The Midas Project's complaint against OpenAI and its CEO, Sam Altman, alleges potential tax violations, conflicts of interest, and misuse of nonprofit grants, suggesting a possible breach of federal tax laws and nonprofit fund usage rules.
- In contrast, the Shiba Inu project, in the realm of cryptocurrency, prioritizes transparency and accountability through its media outlets, the Shib Magazine and The Shib Daily, which share the codebase of its Shibarium Layer 2 network transparently on GitHub.
- As the cryptocurrency world values decentralization and community-driven decision-making, the OpenAI controversy serves as a reminder of the importance of accountability to communities, emphasizing the power of transparency in tech industry values and practices.
