IRS Examinations of Nonprofit Housing Counseling Agencies


This is a pivotal time for nonprofit providers of housing counseling and related services. The Internal Revenue Service ("IRS") has begun to focus on the activities of nonprofit, tax-exempt housing counseling agencies and other organizations engaging in mortgage foreclosure services to determine whether they are operated in furtherance of an exempt purpose, and whether they are complying with the requirements of Section 501(q) of the Internal Revenue Code. Tax-exempt housing counseling agencies need to be aware that they are under the scrutiny of the IRS and must start preparing now to protect their tax-exempt status.

On January 28, 2013, the IRS Director of Exempt Organizations (“EO”) released the IRS Exempt Organizations FY 2012 Annual Report & FY 2013 Workplan. The Workplan sets forth the IRS focus areas for 2013, including the IRS’s continued focus “on organizations that offer or propose to offer foreclosure assistance activities.” According to the Workplan, “as mortgage foreclosures have risen over the past several years, EO has seen an increase in the number of organizations that claim to help individuals facing foreclosure. However, the activities of many of these organizations closely resemble those that EO looked at several years ago — noncompliant organizations that claimed to offer credit counseling support.”

Please see full aticle below for more information.

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Topics:  Compliance, Credit Counselors, Foreclosure, Housing Counseling Agencies, IRS, Mortgages

Published In: Finance & Banking Updates, Nonprofits Updates, Residential Real Estate Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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