120 STAT. 1088
26 USC 513.
VerDate 14-DEC-2004
10:20 Jul 12, 2007
PUBLIC LAW 109–280—AUG. 17, 2006
‘‘(ii) The aggregate revenues of the organization which are from payments of creditors of consumers of the organization and which are attributable to debt management plan services do not exceed the applicable percentage of the total revenues of the organization. ‘‘(B) APPLICABLE PERCENTAGE.— ‘‘(i) IN GENERAL.—For purposes of subparagraph (A)(ii), the applicable percentage is 50 percent. ‘‘(ii) TRANSITION RULE.—Notwithstanding clause (i), in the case of an organization with respect to which the provision of credit counseling services is a substantial purpose and which is described in paragraph (3) of subsection (c) and exempt from tax under subsection (a) on the date of the enactment of this subsection, the applicable percentage is— ‘‘(I) 80 percent for the first taxable year of such organization beginning after the date which is 1 year after the date of the enactment of this subsection, and ‘‘(II) 70 percent for the second such taxable year beginning after such date, and ‘‘(III) 60 percent for the third such taxable year beginning after such date. ‘‘(3) ADDITIONAL REQUIREMENT FOR ORGANIZATIONS DESCRIBED IN SUBSECTION (c)(4).—In addition to the requirements under paragraph (1), an organization with respect to which the provision of credit counseling services is a substantial purpose and which is described in paragraph (4) of subsection (c) shall not be exempt from tax under subsection (a) unless such organization notifies the Secretary, in such manner as the Secretary may by regulations prescribe, that it is applying for recognition as a credit counseling organization. ‘‘(4) CREDIT COUNSELING SERVICES; DEBT MANAGEMENT PLAN SERVICES.—For purposes of this subsection— ‘‘(A) CREDIT COUNSELING SERVICES.—The term ‘credit counseling services’ means— ‘‘(i) the providing of educational information to the general public on budgeting, personal finance, financial literacy, saving and spending practices, and the sound use of consumer credit, ‘‘(ii) the assisting of individuals and families with financial problems by providing them with counseling, or ‘‘(iii) a combination of the activities described in clauses (i) and (ii). ‘‘(B) DEBT MANAGEMENT PLAN SERVICES.—The term ‘debt management plan services’ means services related to the repayment, consolidation, or restructuring of a consumer’s debt, and includes the negotiation with creditors of lower interest rates, the waiver or reduction of fees, and the marketing and processing of debt management plans.’’. (b) DEBT MANAGEMENT PLAN SERVICES TREATED AS AN UNRELATED BUSINESS.—Section 513 (relating to unrelated trade or business) is amended by adding at the end the following: ‘‘(j) DEBT MANAGEMENT PLAN SERVICES.—The term ‘unrelated trade or business’ includes the provision of debt management plan
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