IRS squeezes Credit Counseling Groups Claiming Non-profit

Many credit counseling groups claim they are in it just to help you and not make a profit, as indicated by their status as a charitable organization. The IRS is not happy.

IRS squeezes Credit Counseling Groups Claiming Non-profit

Over the past five years, the IRS has given a much closer look at companies that claim to be non-profit organizations. Given the reduction of tax loopholes over the years, the agency has taken note of the fact that many high-end tax strategies now involve some kind of charitable organization. In performing the analysis, the IRS has found nothing worse than a set of business terms that the credit counseling industry.

Since 2004, the IRS audited 63 credit counseling groups claim nonprofit. These "charitable organizations" receive over fifty percent of all revenues of the credit counseling industry, ie, we are talking about a major initiative for revision. Well, guess what 'the IRS found?

To date, the IRS has completed 41 audits. Of these 41 checks, each activity credit counseling had their nonprofit status revoked, proposed revocation or termination without recourse. Yes, each entity has bitten the dust! Can anyone think of a bigger scam?

In these crushing apples, the IRS found a couple of amazing things. The main reason for the groups of waiver was not provided sufficient public utility. They offered little or no counseling or education to individuals. Instead, they were primarily motivated by profit according to the IRS. To top things off, the IRS found the majority of companies have had "only" reports a profit for companies that just happened to be owned by the same parties. Imagine that! Shocking, I tell you.

It must be admitted that these bad apples represent only about 40-50 percent of the credit counseling industry. The rest of the industry that has not been audited would be entirely legitimate. The IRS does not seem to think so. In fact, he sent notices to control every single company that has not yet been audited. I suspect that the bloodbath is only likely to worsen.

Indeed, not all credit counseling agencies are dubiously claiming non-profit. The IRS, in fact, has noticed approved three applications for a huge profit of 100 from 2003! Unfortunately, the IRS did not identify the identity of the three .......