The American Association of Debt Management Organizations (AADMO) has issued a report to the Internal Revenue Service (IRS) about the impact on credit counseling agencies and consumers of the potential revocation of the industry’s 501(c)(3) tax-exempt status.

The report is in response to a request by the IRS for information about the educational and debt relief functions of the industry. It details the real-world educational benefits of debt management plans, the beneficiaries of debt management plans, the burdensome requirements of conflicting state laws, the role of creditors in credit counseling and the modern funding models of non-profit services.

The report comes after several published letters from the IRS denying 501(c)(3) tax-exempt status to new credit counseling agency applications and public speculation about the revocation of 501(c)(3) status for some existing agencies.

Previously, AADMO had supplied the IRS with a 36 page report showing that executive compensation in the credit counseling industry is commensurate with that in the general non-profit organization sector.