adoption

Tax collection may be a necessary evil, but the IRS has been working hard to emphasize the latter over the former. And this applies to conduct beyond the current scandal over political targeting. 

As you may know, adoption is expensive. It costs tens of thousands of dollars, and requires enormous amounts of time and paperwork. To offset this burden—which is largely the result of government regulations—adoptive families can claim a tax credit for as much as $12,970. Or at least families can try to claim that credit, provided the IRS doesn’t hassle them. In 2012, 90 percent of tax returns claiming an adoption tax credit were flagged for more information by the IRS. The IRS then went on to audit 69 percent of all filers claiming an adoption tax credit. Was there rampant fraud, perhaps? Hardly. According to the Taxpayer Advocate Service: 

Of the $668.1 million in adoption credit claims in tax year (TY) 2011 as a result of adoption credit audits, the IRS only disallowed $11 million—or one and one-half percent—in adoption credit claims. However, the IRS has also had to pay out $2.1 million in interest in TY 2011 to taxpayers whose refunds were held past the 45-day period allowed by law. 

This seems like an awfully poor rate of return to excuse hassling just about every family that offers a home to an unwanted child. Beyond some basic safeguards, to the extent government is involved in adoption it should facilitate the process. The audits are especially appalling in light of recent revelations that IRS agents asked a pro-life group about the content of their prayers and told them not to engage in protest activities against Planned Parenthood.

It’s worth noting that the Taxpayer Advocate Service first revealed this targeting of adoptive families in a report last year and no one cared. To the meager extent it’s now been written about, it is only because of scrutiny brought on by the political scandal. Contemplating what other injustices perpetrated by the IRS have escaped notice is disconcerting to say the least.