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.
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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.
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
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