Profit Motive to Cost Credit Counselors Tax-Exempt Status

Forty-one of the 63 credit counseling firms under investigation by the Internal Revenue Service will have their tax-exempt status revoked, according to a story running in The Washington Post. The other 22 aren’t necessarily out of the dog house; the IRS just hasn’t gotten around to them.

The issue for the IRS is that these consumer credit counseling agencies aren’t as altruistically motivated as they seem to be. Most seem to be primarily motivated by profit – and being motivated by profit is a sure-fire way to get yourself off the non-profit roster.

"Our examinations substantiated that these organizations have not been operating for the public good and don't deserve tax-exempt status," Mark W. Everson, IRS Commissioner, told the Washington Post. "These folks are preying on people who are the most vulnerable."

Profit Motive to Cost Credit Counselors Tax-Exempt Status.