Wednesday, July 13, 2011
Kanoy: "The Effectiveness of the Internal Revenue Code's Adoption Tax Credit: Fostering the Nation's Future?"
From Paul Caron's Tax LawProf Blog:
Leah Carson Kanoy (LL.M. (Tax) 2011, Florida) has published Note, The Effectiveness of the Internal Revenue Code's Adoption Tax Credit: Fostering the Nation's Future?, 21 U. Fla. J.L. & Pub. Pol'y 201 (2010). Here is the Conclusion:
The adoption tax credit was designed to further two congressional objectives: to reduce financial barriers to all adoptions and to encourage the adoption of special needs children, such as those in the foster care system. Unfortunately, the adoption credit of I.R.C. § 23 is expensive and has been unsuccessful at achieving the congressional goal of promoting adoptions from foster care. For the credit to successfully incentivize foster care adoptions, it must be structured in a way that it is accessible to lower-income taxpayers who do not have the requisite tax liability to claim the credit. This can be achieved by transforming the current credit into a refundable credit. With the sunset date quickly approaching, Congress must determine whether it should continue to allow millions in forgone revenue without the corresponding desired result, or whether it should consider implementing new spending alternatives that would effectively promote its objectives.