The government puts strict operational restrictions and rules on all nonprofit organizations – and imposes severe penalties for violation:
Payment of profits or other private benefits to directors, officers, and staff members are prohibited. Reasonable salaries and standard employment benefits are allowed as long as they pass the standard of comparability.
Income from sources unrelated to the tax-exempt purposes is subject to federal income taxes.
The assets of the organization must be dedicated to tax-exempt purposes, which means that if and when the group dissolves, remaining assets must be distributed to a tax-exempt 501(c)3 charity or a governmental entity.





