Sunday, May 15, 2011
Jonathan M. Layman (J.D. 2011, Capital) has published Comment, Forgiven But Not Forgotten: Taxation of Student Loans Under the Income-Based-Repayment Plan
, 39 Cap. U. L. Rev. 131 (2011). Here is part of the Introduction:
This comment provides a comprehensive review of the law of cancellation of indebtedness income and also describes several Federal Student Loan programs and how such programs address the cancellation of indebtedness issue. Using this background, the comment discusses the apparent inconsistency in the law that exempts cancellation of indebtedness income under some student loan programs but not others. Finally, the comment argues for a change in the law to exempt cancellation of indebtedness income from loans forgiven under the income-based-repayment plan. The author hopes that this comment will provide the reader with a greater understanding of the tax consequences of forgiven debt as well as an appreciation of the need to implement new legislation protecting taxpayers who participate in the income-based-repayment plan from potentially massive tax liability in a single year.