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Credit Counseling Organizations - Income Taxable If Requirements Not Met

If I don’t meet the requirements of Code section 501(q), is my income from debt management plans (DMPs) taxed?

Yes, your DMP services will be treated as unrelated trade or business.

Note:  For example, if you are a school that is exempt under Code section 501(c)(3) and also offer an incidental amount of DMPs, the income from the DMPs will be taxed.

Page Last Reviewed or Updated: 16-Nov-2016