Builder DAO

Summary: This proposal seeks approval for a disbursement of 132 ETH from the Builder DAO treasury to the Operations Working Group wallet. The funds will be used to cover an estimated tax payment of 132 ETH due on September 15, 2023, ensuring compliance with federal tax obligations.

Issue/Context: As outlined at the establishment of the DAO, Builder DAO is subject to taxation under US law due to its activities (see Prop 2). The DAO’s UNA structure allows the DAO to pay taxes on an entity level (individual members are not personally liable for taxes).

Because it is in the best interest of the DAO to fulfill its tax obligations accurately and promptly, the DAO granted the Operations Working Group the authority to seek guidance to quantify the DAO’s tax obligations and ensure timely payment (see Prop 58).

The Ops Working Group engaged a bookkeeper (JDFI) and accounting firm (Deloitte) to determine our tax liability and payment schedule. They have concluded that our estimated tax liability is approximately 132 ETH, due September 15, 2023.

By covering the estimated tax liability with this disbursement, we avoid potential legal and financial complications. Additional context on the DAO’s tax obligations are outlined in this previously provided Builder DAO Tax FAQ and in this Discourse post.

Proposal: A disbursement of 132 ETH from the DAO treasury to the Operations Working Group wallet. This amount will be used solely to cover estimated taxes for the DAO, ensuring compliance with tax regulations. The following steps will be taken:

• Initiate the transfer of 132 ETH to the Operations Working Group wallet.
• Compile necessary documentation and collaborate with tax professionals to accurately report and pay the estimated taxes.
• Work with Utopia and Bridge.xyz to submit tax remittance (paid in ETH from the Operations Working Group wallet and converted to USD using Utopia/Bridge’s services)
• Report back to the DAO once the estimated tax has been paid and once we have a final return.
• Any unused funds shall be returned to the DAO treasury.

North Star Check: This proposal aligns with the mission of the DAO by demonstrating responsible financial management and legal compliance under our existing legal structure as an UNA.

Accountability: The funds will be allocated as follows:

132 ETH for tax payment

Paid on or before 9/15/2023

Timeline:

Transfer of funds: Within 2 days of proposal approval

Estimated tax payment: No later than 9/15/2023

Success Metrics:

The success of this proposal will be measured by:

• Timely and accurate tax reporting and payment
• Limited legal or financial consequences related to tax compliance
• Transparent communication regarding the process and outcome

Treasury Impact: Total amount requested: 132 ETH

Percentage of treasury funds requested: Approximately 24.2%

Transparency: There are no conflicts of interest or disclosures related to this proposal.

Authors: Lilac.eth & Shaz

Tax Information: The responsible party for tax reporting are the UNA administrators who will work alongside tax professionals to ensure accurate reporting and payment.