An Illinois down-payment-assistance organization and its president have been permanently barred from making false and misleading statements in promoting their program to house sellers, officials said today.
West Dundee, Ill.-based Partners in Charity Inc. (PIC) and its president, Charles M. Konkus of Barrington, Ill., have been permanently barred from making false and misleading statements in promoting the down-payment-assistance program, the Justice Department said.
According to the government’s amended complaint, PIC enters into “down-payment-assistance” contracts with house sellers. Under these contracts, PIC agrees to provide the down payment to people who buy the sellers’ houses, and the sellers agree to reimburse PIC for the down payment and to pay PIC an administrative fee, the complaint says.
The suit alleges that in marketing and operating this scheme, PIC and Konkus falsely advised house sellers and others that the sellers may claim charitable deductions on their federal income tax returns for the amounts they pay PIC under these contracts.
Sellers’ payments are not deductible charitable contributions, the Department of Justice said. The injunction requires the defendants to refrain from falsely claiming that these contributions are deductible.
The government’s court filings alleged that the payments did not proceed from “detached and disinterested generosity,” but rather were made in order to “facilitat[e] the sale of the seller’s house.”
PIC and Konkus agreed to the civil injunction order, which also requires them to post a copy of the injunction on PIC’s Web site and to give the Justice Department relevant information about participants in PIC’s program, officials said. Konkus was not immediately available to discuss the case.
The amended complaint also alleged that a significant portion of house sellers participating in the PIC program improperly claimed a charitable deduction on their federal income tax returns.
“The Tax Division of the Department of Justice has made it a high priority to put an end to the business of providing false tax advice,” said Eileen J. O’Connor, assistant attorney general for the Tax Division, in a statement.
“Anyone receiving tax advice should verify the motives and qualifications of those giving it, even those claiming to be charitable organizations,” O’Connor said.
“We’re starting to see instances where charities facilitate and encourage inappropriate deductions,” said IRS Commissioner Mark W. Everson. “Maintaining the integrity of charities and ensuring they operate for the public good is an enforcement priority for the IRS.”