Credit Counseling Organizations: Effect of "Fair Share" Payments on Exempt Status
Can a credit counseling organization that receives fair share payments from credit card companies also qualify for tax-exempt status?
Yes, a credit counseling organization that meets the requirements of section 501(c)(3) and 501(q) will be tax exempt, even if it receives “fair share” payments. However, the statute limits the revenue an organization may receive from its customers' creditors which are attributable to debt management plan services.
Fair share payments are payments made by some credit card companies to credit counseling organizations based on the amount the organization collects from the consumer.