Credit Counseling Organizations - Taxable Subsidiaries


Can we put our activities that don’t meet the criteria of Code section 501(q) into a wholly-owned taxable subsidiary?

No.  You may not own more than 35 percent of a business that lends money; repairs credit; or provides debt management plan (DMP) services, payment processing, or similar services.

Note: Examples include a DMP processor, a debt-negotiation/debt-settlement service, and a pay-day or short term loan initiator.