The IRS has a relatively simple document that explains the criteria and process for tax-exemption. It is available as an Adobe Acrobat file from the IRS's Web site. I strongly recommend that you read this document before filing for incorporation as a non-profit entity. 7.3 Canada Thanks to Chris Browne for the following comments about the Canadian situation. 7.4 Political issues Chris Browne has the following to say about the kinds of inter-LUG political dynamics that often crop up.
People have different feelings about free software.
Linux users are a diverse bunch. As soon as you try to put a lot of them together, there are some problem issues that can come up. S.E. Keep in mind that all three of these companies have made and continue to make significant contributions to free software. Do not presume that all people promoting this sort of view are necessarily greedy leeches. If these people are put together in one place, disagreements can occur.