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Nonprofit Law/Conflict of interest


I am a psychiatrist and I would like to start a non-profit community mental health agency.  I plan to be the president/CEO.  Would there be a problem with me also working at the same agency as a psychiatrist seeing patients.

I have in my profile that this free forum is only for general questions about IRS federal exemption issues of 501(c)(3) organizations. There is not a problem with the IRS if you are the President/CEO as well as a psychiatrist seeing patients, as long as the organization follows the procedures that the IRS wants to see to make sure that you do not receive more than reasonable compensation (independent public board making the assessment using community values).  

You put "Conflict of Interest" in the subject heading.  There is a conflict of interest and that is why the independent board (with you recusing yourself from the vote and consideration) would need to make the contract with you.  The IRS does allow 501(c)(3) organizations to give someone compensation as long as it is not more than what is reasonable. Starting on pdf page 10 of
the IRS discusses many of the factors it would look at to decide whether a salary is reasonable.

Harvey Mechanic
Attorney at Law

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.

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Harvey Mechanic


I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "" without the quotes and then add your search terms before hitting enter.


I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.


B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.

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