503C is your friend
I posted this three months ago, and it still applies, so here goes:
according to IRS regulations, you cannot "turn a non-profit organization into a profit making organization" without first giving (not selling) all assets of the non-profit to another non-profit. not for money, they must be given.
otherwise anyone could start a 'non-profit' and not pay tax and then when you're ready, just say 'ok i am a regular corporation now, just forget about all the tax i never paid before'.
if you begin to operate the non-profit profitably using assets acquired or created during the non-profit period, there is a 200% IRS tax penalty.
self-dealing as a non-profit, where a member of that non-profit makes money off of the non-profit, which benefits the individual at the expense of the non-profit, is a federal tax felony.
and of course there is the IRS snitch reward program, where if you inform on a tax cheat, you get a percentage (typically 40%) of the fine they pay.
$1.2 billion x 200% = $2.4 billion
40% reward = $960 million that the EFF or others could claim if they levy charges of tax fraud (which this most definitely is).