WASHINGTON – Internal Revenue Service Commissioner Mark Everson told the House Ways and Means Committee’s Subcommittee on Oversight that the agency is poised to start cracking down on credit counseling firms run by individuals who “seem motivated by profit more than charity.” “We have designed a comprehensive multi-faceted strategy to address alleged abuses, and commissioned a team to oversee the strategic management of our compliance efforts,” Everson wrote in prepared testimony. “Members of this coordinating team include individuals from all functions within the exempt organizations office at the Service, as well as lawyers from the Office of the Chief Counsel.” Everson told legislators that the IRS has 850 non-profit credit counseling agencies on its rolls and that the number has been growing in recent years, often without any real check on their authenticity. “Among the more recent applicants, we are finding credit counseling organizations that vary from the model approved in the earlier rulings and court cases,” Everson wrote. “We are seeing organizations whose principal activity is selling and administering debt management plans. Often the board of directors is not representative of the community and may be related by family or business ties to the for-profit entities that service and market the debt management plans,” he added. Everson also noted that increasing numbers of organizations are supported by fees from customers and from credit card companies and the fees are much higher than those in the rulings or court cases. “It does not appear that significant counseling or education is being provided,” he added.

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.

Already have an account?

 

Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including TreasuryandRisk.com and Law.com.

Already have an account? Sign In Now
Join Credit Union Times

Copyright © 2023 ALM Global, LLC. All Rights Reserved.