With increased scrutiny and regulation by Congress and the Internal Revenue Service, it is becoming more important for non-profits to focus on compliance with both federal and state rules. Under Texas law, non-profit corporations are prohibited from making loans to officers, directors, or members. Directors who approve a prohibited loan and officers who participate in making a prohibited loan are jointly and severally liable to the corporation for the total amount of the loan until it is repaid. Even loans to employees and officers that are excepted from this rule can result in penalties under the Internal Revenue Code for impermissible private inurement, excess benefits, or self-dealing.