Federal Debt Counseling Shocker
May 17th, 2006 by jhampton
The federal government is finally taking charge and revoking the tax exempt status on many non-profit debt counseling services. The last year has seen a definite focus on cleaning up the debt counseling industry.
High fees and high-pressure tactics were two hallmarks of credit
counseling groups whose tax-exempt status the IRS revoked, Everson said.
He would not say whether any of the groups were among those that other federal agencies had recommended for credit counseling.
IRS spokesman Michael Devine noted that the IRS may have different
criteria than other federal agencies. For example, he said, the U.S.
Trustees for Bankruptcy may not be concerned with whether an
organization is complying fully with the tax code as it relates to
exempt organizations.
counseling groups whose tax-exempt status the IRS revoked, Everson said.
He would not say whether any of the groups were among those that other federal agencies had recommended for credit counseling.
IRS spokesman Michael Devine noted that the IRS may have different
criteria than other federal agencies. For example, he said, the U.S.
Trustees for Bankruptcy may not be concerned with whether an
organization is complying fully with the tax code as it relates to
exempt organizations.
The IRS complained that these companies were not only not looking out for the well being of consumers (a key component of a non-profit group), but seemed only interested collecting the high fees associated with their services.
Of course, add to this story the fact that new regulations mean you MUST undergo credit counseling to file bankruptcy, and the government has a potential mine field on their hands.
Relevant Tags: bankruptcy, credit card debt, credit counseling, debt counseling, debt help, non profit credit counselorsPosted on Wednesday, May 17th, 2006 at 8:16 pm In Debt Elimination