points by iamnothere 7 days ago

Actually as a nonprofit you are required to pay at or below a reasonable wage/salary or you may face sanctions: https://www.nolo.com/legal-encyclopedia/how-determine-reason...

Similarly as an S Corp (maybe other corp types too) then officers must take at or above a reasonable wage/salary to limit the tax advantage: https://www.irs.gov/pub/irs-news/fs-08-25.pdf

This is intended to prevent people from, for instance, setting up a “nonprofit” where they just funnel all gains into their pocket while gaining all the other tax benefits of being a nonprofit. You can’t overpay people, you can’t engage in transactions where you intentionally overpay a supplier for materials/services and then they compensate you for the extra amount, etc.