Barry Braden <tobba[at]aol.com> wrote:

- quote -

In theory the answer is yes. You are not the owner of a
nonprofit, the state is. Directors of nonprofits generally
don't take salaries for their services in that capacity.
But you are allowed to receive a reasonable salary in your
capacity as an employee of the corporation.

For one nonprofit I set up the IRS agent wanted my clients
(the directors of the corporation) to waive the ability to
receive any money at all from the corporation, other than
reimbursement of expenses. The law does not require that,
but the agent was looking for something in the application
to reject. The IRS will often look for something to
criticize even when everything is legally proper, but that
was the only time that particular issue came up.

The clients didn't object so I didn't fight it. But you do
have to be careful and prepared for the issue to come up
during the IRS approval process.

Stu

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >

Barry Braden wrote:

- quote -

This "think tank" organization would have to be formed as a
corporation I think and go through all the hoops of applying
to be a qualified organization (section 501 something or
other). A lot of expense just with that. Then the tax
filing requirements every year, both federal and state. And
since you would be an employee, payroll taxes both federal
and state; unemployment taxes...... And you'd still have
to pay income tax on all the profits anyway......

Hmmmm. is this a good idea?

ChEAr$,
Harlan Lunsford, EA n LA

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >

Barry Braden <tobba[at]aol.com> wrote:

- quote -

Possibly.

One of the types of organizations that can apply and be
determnined to meet the requirements of a 501(c)(3)
nonprofit eligible for gifts that are deductible to the
donors is an educational organization.

The better question is why you want to do this?

True, a 501(c)(3) allows donors to deduct their gifts to
you.

But your annual tax returns become public information. In
fact, until just recently, if you had unrelated taxable
business incomne you would report it, pay tax onn it, but
that information was not public. No more.

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >

I am a retired college math and physics professor who would
like to set up a "think tank" that could receive government
grants to do theoretical research in an office I would lease
from a local university. I was just wondering if this
organization could recieve tax exempt status even though I
was its one and only employee, and any grant money it
received would essentially accrue to me.

Thanks very much for any help anyone could give me on this.

Barry Braden, Ph.D.

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >