IRS investigation targets credit counselors

WASHINGTON -- The Internal Revenue Service has canceled the tax-exempt status of some of the largest credit counseling services after audits showed they exist mainly to prey on debt-ridden customers, IRS Commissioner Mark Everson said yesterday.

''These organizations have not been operating for the public good and don't deserve tax-exempt status," he said.

A two-year investigation of 41 credit counseling agencies resulted in the revocation, proposed revocation, or other termination of their tax-exempt status, he said.

The IRS did not identify the organizations. But its website listed several consumer counseling services whose tax-exempt status has been revoked.