Many Credit Counselors Losing Non-Profit Status
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Many
Credit Counselors Losing Non-Profit Status
If you’ve
ever needed help with your debt payments, you may have used
the services of a non-profit credit counseling service. Perhaps
that non-profit status made you feel the agencies were more
credible, not simply trying to make a buck off of your poor
financial health. If so, the Washington
Post reports that many of these credit counseling firms
are losing that tax-exempt status, due to complaints that they
are overcharging and pressuring customers, and due to the Internal
Revenue Service’s view that they are paying no taxes while giving
fat salaries to agency CEOs and funneling money out to for-profit
affiliates.
So
far, not one credit counseling agency has kept its tax-exempt
status, out of over 30 that the IRS has audited.
The
article goes on to mention that at the same time credit counselors
are losing their tax-exempt status, last year’s new bankruptcy
law mandates that many new bankruptcy filers will have to use
“approved” credit counselors as part of their bankruptcy
program. If the IRS can’t find even one credit counselor that
provides enough educational services to deserve its non-profit
status, who will counsel bankruptcy filers?
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