TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

A Member of the Law Professor Blogs Network

Monday, December 2, 2013

Gossett: The Federal Adoption Tax Credit and International Adoption

DeLeith Duke Gossett (Texas Tech), If Charity Begins at Home, Why Do We Go Searching Abroad? A Call to Sunset the Portion of the Federal Adoption Tax Credit that Subsidizes International Adoptions, 17 Lewis & Clark L. Rev. 839 (2013):

Unlike the media frenzy that surrounded Angelina Jolie’s and Madonna’s international adoptions, noted director Steven Spielberg’s adoption of two African American children from the Los Angeles foster care system received very little fanfare. Spielberg went on to establish the Children’s Action Network, a non-profit organization dedicated to finding permanent homes for the thousands of children stuck “in the system” of foster care. He documented their stories and their hopes of someday being adopted. For many, however, adoption is a dream yet to be realized.

Currently, nearly half a million children reside in United States foster care, some “aging out” without ever having been adopted. Beginning in the 1980s and carrying through the 1990s, Congress passed a series of legislative measures aimed at helping those children in the system. As incentive for placing children in permanent homes, and as part of the Adoption Promotion and Stability Act of 1996, a tax credit was made available for those who adopted children. Since that time, the federal adoption tax credit has risen to as high as $13,360 per child, some years as refundable and other years as non-refundable.

On June 28, 2012, in a controversial 5-4 opinion, the United States Supreme Court upheld the constitutionality of the Patient Protection and Affordable Care Act healthcare legislation championed by President Obama. A little known part of that legislation was the extension, expansion, and enhancement of the adoption tax credit provided by the federal government. Even though the act withstood judicial scrutiny, the high numbers are scheduled to sunset in December 2012, and revert to levels of $6,000. Petitioners are already lobbying Congress to renew it at the increased level for 2013. In fact, legislation was introduced earlier this year that would expand the credit and make it permanently refundable.

In recent years, international adoption has become the new social trend, fueled by celebrity and evangelical circles alike (although arguably for different reasons), even though a large number of children remain in the foster care system. Children from other countries are now being imported to form the new American families, and those who adopt internationally, whether they receive $13,360, or even $6,000, are receiving the same tax benefits as those who adopt domestically. And while this may add to the diversity of our culture, and provide those adopting with a sense of fulfilling a higher purpose, the very ones who were the intended beneficiaries of the legislation, those “lost in the system,” remain there and are not being helped as the statute originally intended. Because the tax credit should be used to reclaim children from the foster care system — not to subsidize international adoptions — it is time to let the international portion of the tax credit sunset and focus taxpayer resources on those whom the tax credit originally sought to help.

http://taxprof.typepad.com/taxprof_blog/2013/12/gossett-.html

Scholarship, Tax | Permalink

Comments

When I see articles like this, I think about all the unforeseen consequences that these actions cause. While I think that it's commendable to try and do something to solve the problem of children aging out of foster homes, these measures seems short sighted and are bound to fail and cause further hardships in the future.

Posted by: Owen Hogarth | Dec 2, 2013 1:32:48 PM