Earlier this year, the Internal Revenue Service’s (“IRS”) Exempt Organizations (“EO”) division unveiled its annual work plan. The plan highlights EO’s priorities for the year and is the best indicator of what the staff will be focused on in its determinations and examinations activities. These areas of focus were recently reiterated in remarks at a tax-exempt organizations conference attended by IRS EO staff.

One of the plan’s six general work areas is of special interest to credit and housing counseling agencies.

The plan calls out the increasing challenges confronted by the IRS, as residential foreclosures have mounted and the number of exempt organizations involved in foreclosure assistance activities has increased. See page 11 of the IRS’s FY 2012 Work Plan available on the IRS website by clicking below.

According to the report, in FY 2012, both EO’s Determinations and Examinations offices will focus on the activities of mortgage foreclosure assistance organizations to determine whether they are fulfilling their exempt purpose, and whether they are complying with the requirements of section 501(q) of the Internal Revenue Code (the “Code”).

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