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The Corporation’s board comprised a few folks: the Incorporator, a real estate investor, and a minister/business operator. The Incorporator was used by and acquired compensation within the Group.
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Without having an explanation, the IRS determined that Code § 501(q)—a section reserved for corporations participating in a considerable quantity of credit counseling things to do—was applicable towards the Corporation While the Firm did not provide any credit rating counseling services Except for its personal loan mitigation services.
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The details discussed in PLR 201307015 appear to aid the fundamental adverse determination regarding the Group’s tax-exempt standing. Nonetheless, the IRS remedy of the issues discussed higher than really should alarm businesses that can probably be examined under the future compliance challenge, as the IRS treatment method of those problems was extremely intense and, with regard for the personal inurement issue, with no authorized foundation.
The inner Earnings Assistance (IRS) is making ready an business-large assessment of tax-exempt corporations which can be engaged in house loan foreclosure assistance, like housing counseling businesses (the “compliance task”). In reality, the IRS has presently begun scrutinizing intently any this kind of organizations which have used for exempt status recognition in new months. In February 2013 on your own, the IRS posted a few Personal Letter Rulings (PLRs) denying tax-exempt standing to companies that purported to provide housing counseling and foreclosure assistance.
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As housing counseling and foreclosure prevention corporations have begun making ready to the IRS compliance project, there are already many issues concerning the applying of Code § 501(q) to housing counseling companies. The posted rulings, Specially PLR 201305013, show which the IRS intends to apply Code § 501(q) to all housing counseling and foreclosure assistance corporations that supply even negligible “counseling” or “academic” programing.
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