It's not quite a BSD license if they require the source and binaries contain that notice.
That's a pretty vanilla 3-clause BSD licence just like you'd see anywhere else, I don't see a problem with it.
That's plenty of work but there are people willing and able to get it done and they have a bootable system to evolve. The real question is when someone will kick off a full distro around it (since Illumos is purely a kernel).
We believe everything is now up to date - the IRS filings were part of the same issue we inherited from the early days of OSI. We (mainly OSI's Treasurer Danese Cooper actually) worked on these issues last year with the help of DLA Piper (law firm donating their service) and today we are completely in the good graces of both the IRS and the California State Franchise Tax Board.
If you are aware of other issues that haven't popped up on our radar, please tell osi (at) opensource (dot) org so we can fix them. I realise that's not so much fun as posting them on Slashdot first, but it will help get things fixed faster just like filing a fix on Subversion fixes software faster than writing to The Register about it.
Note that the story here was that, much to the current Board's surprise, it turned out that accounts for some previous years well in the past had been created but for some unknown reason not filed with the State of California. The first the current Board knew of this was when we heard about the suspension. We immediately located the old accounts and arranged for them to be retrospectively filed, and in response the State lifted its suspension.
Naturally there are people who want to keep the memory of this incident alive and are doing their best to raise it every time OSI is mentioned. While not desirable, we've since heard from many sources that this is an all-too-common event for all-volunteer organisations.
After any salary raise, you will have less money at the end of the month than you did before.