Tax Planning and Compliance for Tax-Exempt Organizations, Fifth Edition 2014 Cumulative Supplement

CHAPTER 4

Charitable Organizations

§ 4.2 Promotion of Social Welfare

(b) Credit Counseling and Mortgage Assistance Organizations

*§ 4.3 Lessening Burdens of Government

§ 4.6 Promotion of Health

*(j) § 501(r) Requirements for Hospitals

§ 4.2 Promotion of Social Welfare

(b) Credit Counseling and Mortgage Assistance Organizations

p. 84. Add after first paragraph:

The IRS emphasized several portions of new § 501(q) in denying exemption to a prospective credit counseling organization. Charging fees that are consistent with market rates for similar counseling by a for-profit entity rather than rates based on the recipient's ability to pay was deemed to evidence operation as a commercial, rather than charitable, business. Another fact leading to denial was that the CEO controlled the organization and the “entire enterprise is carried on in such a manner as to substantially benefit the CEO in her personal capacity.”¹

p. 84. Add to footnote 65:

IRS updated its FAQs on Credit Counseling Organizations on November 1, 2011.

§ 4.3 Lessening Burdens of Government

*p. 88. Add new bullet:

• Program to improve health care quality and reduce health care costs with regional health information technology was deemed to be charitable because it lessened the burdens of government.²

§ 4.6 Promotion of Health

(j) § 501(r) Requirements for Hospitals

p. 110. Add after last paragraph in this section:

On June 21, 2012, the Treasury Inspector General for Tax Administration (“TIGTA”) issued a report regarding ...