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FOR IMMEDIATE RELEASE TAX

MONDAY, NOVEMBER 14, 2005 (202) 514-2007


WWW.USDOJ.GOV TDD (202) 514-1888

JUSTICE DEPARTMENT SUES


ILLINOIS
DOWN-PAYMENT ASSISTANCE
ORGANIZATION
Partners in Charity, Inc. Allegedly Promotes Multi-
Million Dollar Housing Program by Falsely Advising
Sellers They Can Claim Tax Deductions
WASHINGTON, D.C. - The Justice Department announced today that it has filed a
civil injunction lawsuit in the U.S. District Court for Northern District of Illinois, in
Chicago, seeking to bar Partners in Charity, Inc. (PIC) from making false and
misleading statements in promoting to house sellers a program that assists buyers to
fund the purchase of a house.

According to the government complaint, PIC is a tax-exempt organization, based in


West Dundee, Illinois, that enters into contracts with house sellers under which PIC
agrees to provide funds to assist house buyers in making down-payments on the
purchase of a house: a practice known as “down-payment assistance.” PIC
advertises that its program benefits sellers by providing sellers with a larger pool of
potential buyers, the complaint states. In consideration for sellers’ participation in
the program, PIC requires sellers to “reimburse PIC for the amount of the down-
payment . . . assistance plus an administrative fee,” according to the complaint.

The suit alleges that in marketing and operating this scheme, PIC falsely advises
house sellers and others that the sellers may claim charitable deductions on their
federal income tax returns for amounts they are contractually obligated to pay PIC.
According to the court filing, seller’s payments are not deductible charitable
contributions, because they do not proceed from “detached and disinterested
generosity,” but rather the payments are made in order to “facilitat[e] the sale of the
seller’s house.”

According to the government complaint, a significant portion of house sellers


participating in the PIC program have improperly claimed a charitable deduction on
their federal income tax returns. The suit asks the court to order PIC to provide the
government with a complete list of the sellers’ names, addresses, telephone
numbers, e-mail addresses, and Social Security numbers.

“Putting a stop to abuse of tax-exempt status is a high priority for the IRS and the
Justice Department’s Tax Division,” said Eileen J. O'Connor, Assistant Attorney
General for the Department of Justice's Tax Division. “The IRS will not tolerate
schemes that mislead honest home sellers and tarnish the image of charities,” said
IRS Commissioner Mark W. Everson.

This case is part of the IRS’s and Justice Department’s initiative to stop abusive tax
schemes. More information about the initiative is available at . More information
about the Justice Department’s Tax Division is available at .

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