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Are the Monthly Fees I Paid for Debt Settlement Tax Deductible? – Susan

“Dear Jim,

I engaged Greensheild FS after loosing my job5/2009, due to @ 50, 000 in debt. I started paying their fee 7 2009. I was not able to get a copy of the the contract on line until two months before I found my account had been transferred to davenport law (@12 2010). Each month I was charged 330 or 165$ -depending on cash flow. I repeatedly asked for a copy of the alleged contract. My family paid off one credit card at a lesser amount than quoted by gfs so I owe about 30,000. GFS said they would look into decreasing the monthly fee as I handled the payoff-not them. Now davenport law calls wanting to pick up the contract where gfs left off-saying they can do even better-as in better than nothing?-that isn’t much. I’m in no hurry to commit to another company who’ll take my money and do nothing to resolve my issues.

Are the monthly fees charged by gfs tax deductible? or-how can I get my money back? -they provided no services

Susan”

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The Answer

Dear Susan,

Thanks for your question. Because your monthly fees are fees and repayments related to personal debt, they are not tax deductible.

As far as getting your money back, I would pursue the company who is servicing your debt. If you do not have any success or response, consider the BBB or having a local attorney intervene on your behalf.

Your tax servant.

Jim

Are the Monthly Fees I Paid for Debt Settlement Tax Deductible?   SusanJim Buttonow is one of the resident debt experts here at GetOutOfDebt.org that helps people for free. Jim is a licensed CPA who spent 19 years with the IRS coordinating large compliance teams of IRS agents and specialized personnel. In the last 5 years, Jim has invented consumer and practitioner software and treatises on how to address many different tax issues. He has also represented many people before the IRS examination, collection, filing, and appeals functions. He currently assists taxpayers on an active pro bono tax practice aimed at serving people in need. He can be reached at IRSMind.com.

If you have a tax question you’d like to ask just use the online form. I’m happy to help you totally for free.

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About Jim Buttonnow

Jim Buttonnow
Jim Buttonow, CPA/CITP, is cofounder of Beyond415. He has more than 26 years of experience in IRS practice and procedure. Reach Jim at [email protected].

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