I

103D CONGRESS

1ST SESSION H. R. 930

To amend the Internal Revenue Code to allow a deduction for qualified

adoption expenses, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 17, 1993

Mr. JACOBS introduced the following bill; which was referred to the Committee

on Ways and Means

A BILL

To amend the Internal Revenue Code to allow a deduction

for qualified adoption expenses, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Fairness for Adopting

5 Families Act’’.

6 SEC. 2. DEDUCTION FOR ADOPTION EXPENSES.

7 (a) DEDUCTION FOR ADOPTION EXPENSES.—

8 (1) IN GENERAL.—Part VII of subchapter B of

9 chapter 1 of the Internal Revenue Code of 1986 (re10 lating to additional itemized deductions for individ-
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1 uals) is amended by redesignating section 220 as

2 section 221 and by inserting after section 219 the

3 following new section:

4 ‘‘SEC. 220. ADOPTION EXPENSES.

5 ‘‘(a) ALLOWANCE OF DEDUCTION.—In the case of an

6 individual, there shall be allowed as a deduction for the

7 taxable year the amount of the qualified adoption expenses

8 paid or incurred by the taxpayer during such taxable year.

9 ‘‘(b) LIMITATIONS.—

10 ‘‘(1) DOLLAR LIMITATION.—The aggregate

11 amount allowable as a deduction under subsection

12 (a) for all taxable years with respect to the legal

13 adoption of any single child by the taxpayer shall

14 not exceed $5,000 ($7,000, in the case of an inter15 national adoption).

16 ‘‘(2) INCOME LIMITATION.—The amount allow17 able as a deduction under subsection (a) for any tax18 able year shall be reduced (but not below zero) by

19 an amount which bears the same ratio to the

20 amount so allowable (determined without regard to

21 this paragraph but with regard to paragraph (1))

22 as—

23 ‘‘(A) the amount (if any) by which the tax24 payer’s taxable income (determined without re-
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1 gard to this section and section 137) exceeds

2 $60,000, bears to

3 ‘‘(B) $10,000.

4 ‘‘(3) DENIAL OF DOUBLE BENEFIT.—

5 ‘‘(A) IN GENERAL.—No deduction shall be

6 allowed under subsection (a) for any expense

7 for which a deduction or credit is allowable

8 under any other provision of this chapter.

9 ‘‘(B) GRANTS.—No deduction shall be al10 lowed under subsection (a) for any expenses

11 paid from any funds received under any Fed12 eral, State, or local program.

13 ‘‘(c) QUALIFIED ADOPTION EXPENSES.—For pur14 poses of this section—

15 ‘‘(1) IN GENERAL.—The term ‘qualified adop16 tion expenses’ means reasonable and necessary adop17 tion fees (including agency fees), court costs, attor18 ney fees, and other expenses which—

19 ‘‘(A) are directly related to the legal adop20 tion of a child by the taxpayer but only if such

21 adoption has been arranged—

22 ‘‘(i) by a State or local agency with

23 responsibility under State or local law for

24 child placement through adoption,
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1 ‘‘(ii) by a non-profit, voluntary adop2 tion agency which is authorized by State or

3 local law to place children for adoption, or

4 ‘‘(iii) through a private placement,

5 and

6 ‘‘(B) are not incurred in violation of State

7 or Federal law.

8 ‘‘(2) ADOPTION EXPENSES NOT TO INCLUDE

9 CERTAIN AMOUNTS.—The term ‘qualified adoption

10 expenses’ shall not include any expenses in connec11 tion with—

12 ‘‘(A) the adoption by an individual of a

13 child who is the child of such individual’s

14 spouse, or

15 ‘‘(B) travel outside the United States, un16 less such travel is required—

17 ‘‘(i) as a condition of a legal adoption

18 by the country of the child’s origin,

19 ‘‘(ii) to assess the health and status of

20 the child to be adopted, or

21 ‘‘(iii) to escort the child to be adopted

22 to the United States.

23 ‘‘(3) CHILD.—The term ‘child’ means an indi24 vidual who at the time of adoption under this section

25 has not attained the age of 18.’’.
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1 (2) CLERICAL AMENDMENT.—The table of sec2 tions for such part VII is amended by striking the

3 item relating to section 220 and inserting the

4 following:

‘‘Sec. 220. Adoption expenses.

‘‘Sec. 221. Cross reference.’’.

5 (b) DEDUCTION ALLOWED IN COMPUTING AD6 JUSTED GROSS INCOME.—Subsection (a) of section 62 of

7 such Code is amended by adding after paragraph (13) the

8 following new paragraph:

9 ‘‘(14) ADOPTION EXPENSES.—The deduction

10 allowed by section 220.’’.

11 (c) ADOPTION ASSISTANCE PROGRAMS.—

12 (1) IN GENERAL.—Part III of subchapter B of

13 chapter 1 of such Code (relating to items specifically

14 excluded from gross income) is amended by redesig15 nating section 137 as section 138 and by inserting

16 after section 136 the following new section:

17 ‘‘SEC. 137. ADOPTION ASSISTANCE PROGRAMS.

18 ‘‘(a) IN GENERAL.—Gross income of an employee

19 does not include amounts paid or expenses incurred by the

20 employer for qualified adoption expenses in connection

21 with the adoption of a child by an employee if such

22 amounts are furnished pursuant to an adoption assistance

23 program.

24 ‘‘(b) LIMITATIONS.—
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1 ‘‘(1) DOLLAR LIMITATION.—The aggregate

2 amount excludable from gross income under sub3 section (a) for all taxable years with respect to the

4 legal adoption of any single child by the taxpayer

5 shall not exceed the excess (if any) of $5,000

6 ($7,000 in the case of an international adoption)

7 over the amount allowable as a deduction (or

8 amounts taken into account in computing the deduc9 tion) under section 220 with respect to such adop10 tion.

11 ‘‘(2) INCOME LIMITATION.—The amount ex12 cludable from gross income under subsection (a) for

13 any taxable year shall be reduced (but not below

14 zero) by an amount which bears the same ratio to

15 the amount so excludable (determined without re16 gard to this paragraph but with regard to paragraph

17 (1)) as—

18 ‘‘(A) the amount (if any) by which the tax19 payer’s taxable income (determined without re20 gard to this section and section 220) exceeds

21 $60,000, bears to

22 ‘‘(B) $10,000.

23 ‘‘(c) ADOPTION ASSISTANCE PROGRAM.—For pur24 poses of this section, an adoption assistance program is

25 a plan of an employer—
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1 ‘‘(1) under which the employer provides employ2 ees with adoption assistance, and

3 ‘‘(2) which meets requirements similar to the

4 requirements of paragraphs (2), (3), and (5) of sec5 tion 127(b).

6 ‘‘(d) QUALIFIED ADOPTION EXPENSES.—For pur7 poses of this section, the term ‘qualified adoption ex8 penses’ has the meaning given such term by section

9 220(c).’’.

10 (2) CLERICAL AMENDMENT.—The table of sec11 tions for such part III is amended by striking the

12 item relating to section 137 and inserting the

13 following:

‘‘Sec. 137. Adoption assistance programs.

‘‘Sec. 138. Cross reference to other Acts.’’.

14 SEC. 3. EFFECTIVE DATE.

15 The amendments made by this Act shall apply to tax16 able years beginning after December 31, 1992.

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