More than 3 million homes learned of the spiritual rewards of giving to Church by Mail Inc. The organization supported itself-and its founders-handsomely by asking these sinners to join in the joy of contributing.

 

In one year Church by Mail collected more than $7 million in donations. Of this amount, $325,909 went to officers, $5.7 million to organizers and expenses and $628 to charity.

 

The Internal Revenue Service denied tax-exempt status. For more information see Exempt Organizations at www.taxfables.com

 

Besides withdrawing or withholding exempt status from straying organizations, the IRS pursues people who “loot” charities—even going after managers and directors who permit the pillage. Major contributors, officials and board members who improperly benefit or allow others to benefit are subject to monetary penalties. The penalties apply when the person receives more in money or assets than the value of services or assets the charity receives. For example, the law applies to a fat salary for the manager or a sweetheart contract benefiting the charity's biggest contributor.

 

Recently, the IRS became concerned about the proliferating tax-exempt credit counseling organizations. It will audit many of them because it thinks some officers are profiting more than the clients they serve. With the exempt status, they may circumvent government consumer protection laws, besides not paying taxes.

 

Less reputable counseling organizations charge high fees, claim they can restore credit in a short time, promise to remove negative information from credit reports and even engage in identity theft. When in doubt about one of them, check with the IRS on the organization's exempt status and with the Better Business Bureau.

 

Credit counseling is a great idea and most organizations perform a valuable service educating on how to manage debt or repair a damaged credit rating.

  

THE MORAL: The IRS is spreading the gospel of true charity.