CHAPTER 4Charitable Organizations

  1. *§ 4.1 Relief of the Poor
  2. § 4.2 Promotion of Social Welfare
    1. (b) Credit Counseling and Mortgage Assistance Organizations
  3. § 4.3 Lessening Burdens of Government
  4. § 4.6 Promotion of Health
    1. (g) Health/Fitness Centers
    2. (i) Homes for the Elderly
    3. (j) § 501(r) Requirements for Hospitals

*§ 4.1 Relief of the Poor

p. 77. Add new bullet:

  • Providing job training for hardcore unemployed at a retail grocery store was charitable, but not the primary purpose.1
  • Increasing business patronage in a deteriorated area by providing information on the area's shopping opportunities, local transportation, and accommodations not operated exclusively for charitable purposes was not charitable, but instead promoted businesses.2

§ 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.”3

p. 84. Add to footnote 65:

IRS updated its FAQs on Credit ...

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