Housing Groups Protest IRS Ruling

A coalition of home-buyer-assistance charities is fighting an Internal Revenue Service ruling that would block some nonprofit groups from funneling money to low-income people so they can purchase houses, reports The Washington Post.

The controversial practice takes donations from home sellers and gives the money to potential buyers to help them make down payments. The sellers often recoup their money by raising the amount they charge for the house; the charities that participate receive a service fee from the sellers.

The IRS argues that the practice benefits the donors and the charities and violates federal laws governing tax-exempt groups. It issued a ruling last month that would prohibit groups from making down payments out of money provided by donors who stand to gain financially from a home sale.

Representatives of the housing groups say their work has helped to increase home sales nationwide and deny any wrongdoing. They asked the Treasury Department last week to suspend the IRS decision and to seek comments from the public before issuing a final ruling.

Read The Chronicle’s coverage of the IRS ruling.