TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Tuesday, January 22, 2019

Denying Tax-Exempt Status To Discriminatory Private Adoption Agencies

Allison M. Whelan (Covington & Burling, Washington D.C), Denying Tax-Exempt Status to Discriminatory Private Adoption Agencies, 8 UC Irvine L. Rev. 711 (2018):

This Article ... and argues that the established public policy at issue here is the best interests of the child, which includes the importance of ensuring that children have safe, permanent homes. In light of this established public policy, which all three branches of the federal government have recognized and support, this Article ultimately argues that, consistent with the holding in Bob Jones, private adoption agencies that refuse to facilitate adoptions by same-sex parents, thereby narrowing the pool of qualified prospective parents and reducing the number of children who are adopted, act contrary to the established public policy of acting in the best interests of the child.

This Article proceeds in five Parts. Part I first provides general information about the child welfare system, adoption, private adoption agencies, and the “best interests of the child” standard. Part II describes the emergence of state laws that allow private agencies to refuse to facilitate adoption by same-sex couples. Part III provides an overview of federal income tax exemptions and then summarizes the Supreme Court’s decision in Bob Jones University v. United States. Part IV applies the analysis and holdings of Bob Jones to private adoption agencies that discriminate against same-sex couples, and ultimately argues that such policies are contrary to the established public policy of the best interests of the child. As a result, this Article argues that the IRS should conclude that these agencies do not qualify for exemption from federal income tax. Part V concludes by offering a potential compromise and additional policies the government should consider.

https://taxprof.typepad.com/taxprof_blog/2019/01/denying-tax-exempt-status-to-discriminatory-private-adoption-agencies.html

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Comments

Props to all working very hard for children in need, but should we really hand over micromanaging their "best interests" to tax administrators when we're not even sure we can trust, say, public schools, judges, or even their other parents?

Posted by: Anand Desai | Jan 22, 2019 1:26:43 PM

So this is advocating for a double-blind adoption system in order to obtain tax benefits? You have no idea the age, sex, race, or disability status of whom you go to adopt? I can't think of a better way to discourage all adoptions.

Posted by: ruralcounsel | Jan 24, 2019 10:16:22 AM

This article sounds great in theory, but it lacks any practical application. Biological parents generally have control and can select the adoptive parents for their kids (this does not apply in foster settings, but the article is about adoption agencies specifically). A bio parent that is affiliated with a particular religion that forbids homosexual acts that would otherwise choose an agency that doesn't work with same gender couples is not a bio parent that is likely to select a same gender couple to raise their child if working with a non-religious adoption agency. So this proposal would have zero impact on child placements with same gender couples as long as there are sufficient non-religious agencies to serve the need (which there are), but would impose taxes on religious based family agencies. So is this proposal about equality for same gender couples or about discriminating against religious groups?

Posted by: Anon | Jan 25, 2019 5:44:16 AM