Professor Coven believes that the education assistance provisions enacted in 1997, while long overdue, were ill-considered and poorly constructed. Focusing on what should have been the simple question of who is entitled to claim an education tax credit, this report illustrates the harm that inadequate drafting produces. While section 25A appeared to deny a credit to a dependent child, an unfair and unwise result, the proposed regulations allow parents to shift the credit to their children but only on the forfeiture of the deduction for the personal exemption. That rule, says Coven, imposes a harsh penalty on low and middle-income taxpayers but no penalty at all on high-income taxpayers. Neither result is consistent with the overall aim of the education credits.

This report is an excerpt from a broader study of the drafting deficiencies in the educational assistance provisions currently being undertaken by the author. Because of the poor quality of these sections, considerable corrective legislation will be required to fulfill the promise of the 1997 legislation.

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84 Tax Notes 1643-1649 (1999)

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