A tipster (send in your tips here) forwarded to me two recent formal complaints to the IRS based regarding Budget Right Debt Management and American Credit Counselors. The issue seems to be regarding IRS 501(q) standards. Now normally this is not something I might publish but in this case it seems the ammunition came from the organizations very own public tax returns.
American Credit Counselors
One of the formal requests for investigation says that American Credit Counselors paid $203,790 for marketing services from Exclaim Marketing & Lead on their 2008 IRS 990 tax return. I went and took a look and that is indeed what it says.
While I was looking I took a glance at the public 2010 990 return for American Credit Counselors as well. The nonprofit group states they had income over $10 million and counseled 97,172 individuals but the president works on average twelve hours a week and took no salary.
I’m not saying there is anything wrong with that. I just find it odd.
In addition the company paid more than $6.5 million for management services to BMV Corporation. The company is actually named BMV Debt Management Corporation, at the same address and the last reported officer was Gail Taylor. However both Ran Barnea and Daniel Post were the previous directors. – Source
Barnea and Post are associated with the Consumer Law Group case, an attorney model debt settlement firm that is being sued by the State of North Carolina.
Budget Right Debt Management
The copy of the IRS investigation on Budget Right Debt Management says that according to their own public 990 return, they paid $47,851 for lead expenses.
At the very least, these two examples may give other credit counseling groups and opportunity to review their own filings for similar issues because apparently someone is looking for these types of thing.
You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.
I can always use your help. If you have a tip or information you want to share, you can get it to me confidentially if you click here.