HUD-approved housing counseling agencies are required to be tax-exempt under Section 501(c)(3) of the Internal Revenue Code. In addition, housing counseling agencies may easily fall under the “definition of credit counseling agencies” trigger Section 501(q) of the Internal Revenue Code, which was added by the Pension Protection Act of 2006 and establishes additional standards that a credit counseling organization must satisfy to qualify for tax-exempt status. Recently, the IRS issued its first written guidance under Internal Revenue Code Section 501(q). Not only does the guidance serve as a good reminder of some of the strict prohibitions under 501(q), but it also demonstrates some of the unintended consequences of the 2006 law -- with potentially disastrous implications for some in the housing counseling industry.
In this webinar, Venable attorneys Jonathan Pompan and Matthew Journy explain what this all means, and what you can do to protect your agency from IRS scrutiny and audits.