Internal Revenue Service failed to pay refunds for adoption credits on tax returns, families say

Sometimes, I just don't know where to begin.... so, I'll start with the complaints made by narrow-minded AP's, focused only on their plight and their situation.

"I just feel like it's really unfair. We followed the rules for claiming this credit, sent in all of the proper documentation, we had to wait a year to even claim it," said Beth Ericksen. "It's really unfair for them to hold it up now when we have met all their requirements, followed all of their rules, without any warning or explanation — not even an email from IRS."

"I find it ironic how adoptive parents go through a lot of scrutiny and ultimately the courts decide based on all the evidence that we are trustworthy enough to raise and financially provide for children, but the IRS doesn't trust us or our Certified Public Accountants to fill out our taxes correctly," Travis Ericksen posted on his Facebook page this week. "If the courts trust us why doesn't the IRS trust us? It's insulting!"

It's often assumed the AP is the one type of parent who will dedicate more time, more money to the proper raising of a child.  This theory is confirmed by "study findings" pitched by those promoting tax benefits.

A recent study has found that, on average, adoptive parents spend more money on their children and carve out more time for parent-child activities like reading, talking, and eating together than do their biological counterparts. The findings are being used to challenge opponents of gay and lesbian adoption.

[From:  What's New in Adoption, 2008 ]

That same article points out the real reason behind the many tax benefits/incentives given to adults who choose to adopt.

In 2007, 19,292 children were adopted from abroad, a 15 percent decline from the previous year.

"Hardships", like closed adoption programs, slowed adoption process, limiting quotas (all initiated by sending countries, not the USA, BTW) have made adoption from foster care not the bad-deal so many assume it is.

However, the increasing number in domestic adoption, transracial adoption, and number of adoptive families in America has less to do with helping the older adoptable child in America's foster care system, and much more to do with an improved infant adoption system... a system that prefers to break the mother-child bond, so the more financially desirable paying PAP can get what's really desired, so the government doesn't have to assist the original parent-infant relationship.

Meetings between domestic adopters and birthparents are increasingly common, especially in the Midwest and Western states. A recent study found that 80% of agencies offered “fully disclosed” adoptions, in which both parties meet, up from only 36 percent 15 years ago.

Each year, 25,000 or more U.S.-born infants are adopted domestically, and increased birthparent interest in open adoption is being reported by a number of agencies. By early 2007, 22 states had made open adoption agreements legally enforceable.

Adoption disruption insurance policies resurfaced on the market in 2005, making it possible for prospective adoptive parents to recover their expenses in cases where birthparents decide not to place a child for adoption. The policies are available only for adoptions of U.S. infants, and parents must use an approved agency or attorney. For more information, consult www.adoptionassurance.com.

Adoption from foster care

More people are adopting from foster care. Since the Adoption and Safe Families Act (ASFA) was enacted, in 1997, to speed the adoption of kids in foster care, the number of such adoptions grew to 51,323 in 2005, from 28,000 in 1996. While 114,000 children were waiting to be adopted at the end of 2005, the total number of children in foster care has declined, to 513,000 in 2005, from 567,000 in 1999.

Fears that the rising number of adoptions from foster care would result in more disruptions appear unfounded. A 2006 study of 16,000 adoptive placements over a six-year period in Illinois found that the risk of disruption was 11 percent lower for placements occurring after the passage of ASFA.

Another article, The Adoption Tax Credit: An Ethical Dilemma (2007), puts much of this confusing jibber-jab in much clearer, easy to read English, proving today's well-informed AP's is not given the credit or the title one deserves when facts get overlooked.

Since 1997, many adoptive families have been able to use the federal adoption tax credit. The credit, however, is due to end in 2010 and some legislators are already proposing to extend the credit indefinitely. New evidence suggests that we must not renew the credit without first ensuring that it furthers the goal of promoting and supporting adoptions from foster care.

What the Numbers Tell Us

A recent Child Trends research brief1 uses 1999–2005 data from the U.S. Treasury Department to determine who most benefits from the credit. In his report summary, author Rob Geen reveals that:

•  “The vast majority of adoption tax credit recipients completed private or foreign adoptions rather than adoptions from foster care.”
•  “The tax credit disproportionately supports higher-income families.”
•  “The tax credit primarily supports the adoption of younger children.”
•  “Nearly all foreign adoptions were supported by the…tax credit, but only one in four foster care adoptions were.”

Children adopted from foster care in 2004 represented just 18 percent of children supported by the credit and 17 percent of money spent. In 2005, about two-thirds of the money spent on the tax credit went to tax filers whose annual incomes surpassed $74,999. Nearly 90 percent of filers with incomes above $100,000 adopted internationally or privately, and 71 percent of all families adopted children under age five. Only about 10 percent of higher-income families adopted from foster care, and very few adopted older children.

Parents who adopted foreign children used the tax credit at the highest rate. State Department data indicate that 22,884 children were adopted internationally in 2004. Tax returns suggest that filers claimed 2004 adoption tax credit benefits for 23,296 foreign children.2 Roughly 52,000 children were adopted from foster care in 2004, but taxpayers claimed a credit for just 12,432 of those adoptees—less than a quarter of the children adopted from foster care that year.

In NACAC’s experience, the low rate of tax credit use by those who adopt children with special needs is linked to two main factors. First, many of these adoptive parents simply do not earn enough taxable income or generate enough tax liability to take advantage of a tax credit. Others who adopt from foster care lack accurate information about the credit and thus never use it.

Now, do we really need to go into the ways in which home-study/court approved AP's have HURT and COST the state/USA, in terms of cost and repair needed to undo the damage of a poor adoption plan?  [Why, the failures seen with home-visits, paid Adoption Subsidies, and cases where adopters crate their kids, for disciplining purposes, is enough to keep me busy for hours (of unpaid research and service!)]

I'd be more than happy to showcase the wrongs in lappy-happy Adoptionland... because I really think the whining or "poor discriminated against me, the savior AP" crap needs to stop already. 

No one is forcing people to spend tens of thousands of dollars adults don't have to adopt a foreign child.  (REALLY!)  If you can't afford the price, don't pay the required fee; stop looking for the government hand-out... it's really in poor taste.  Really.