IRS Ends Charity Status for Some Housing Programs
May 8, 2006
The Internal Revenue Service has denied charity status to organizations that provide down-payment assistance to home buyers and get most of their money from home builders and other property sellers, reports The Wall Street Journal.
The IRS said it took action because it was concerned that “organizations claiming to be charities are being used to funnel down-payment assistance from sellers to buyers through self-serving, circular-financing arrangements.”
The IRS said some groups, such as churches, could retain their tax-exempt status by giving prospective home buyers money raised from sources other than home-selling companies.
