Non profit practice

[G Costanza]

What's to stop a licensed clinician from starting a non-profit practice, running it just like a private practice including paying oneself a sizable salary, and utilizing all the perks that come with a 501c?

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[psych.meout]

The IRS?

 

[G Costanza]

Obviously...and yet I'm still wondering what specifically prevents someone from setting up their private practice as a non profit. Non profits certainly accept payments for services, bill insurance companies, pay people salaries etc...
I'm sure there's some clear distinction between the two but I can't find anything in my googling curiousity that seperates the two beyond superficial assumptions about serving the public.

 

[WisNeuro]

"The organization must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization's net earnings may inure to the benefit of any private shareholder or individual."

"A section 501(c)(3) organization must not be organized or operated for the benefit of private interests, such as the creator or the creator's family, shareholders of the organization, other designated individuals, or persons controlled directly or indirectly by such private interests. No part of the net earnings of a section 501(c)(3) organization may inure to the benefit of any private shareholder or individual. A private shareholder or individual is a person having a personal and private interest in the activities of the organization."

 

[G Costanza]

That seems like a clear distinction. Although I could also see how someone with a few shady friends could create a board to oversee the business and allow the therapist to essentially operate autonomously and in the same form of a traditional practice.

Thanks for the info.

 

[WisNeuro]

Well, if Donald Trump can use his charity's money to buy paintings of himself and sports memorabilia, anything illegal is possible to get by the taxman.

 

[PsyDr]

If you wanted to do this, a not for profit structure would work better. At least it does for many of the professional schools....

 

[smalltownpsych]

I would think that it would make sense to consult with an attorney with expertise in this area of business law before setting up the structure.