ADVISORY

FROM THE COMMITTEE ON WAYS AND MEANS

SUBCOMMITTEE ON SELECT REVENUE MEASURES

Neal Announces Hearing on Education Tax Incentives

House Ways and Means Select Revenue Measures Subcommittee Chairman Richard E. Neal (D-MA) announced today that the Subcommittee on Select Revenue Measures will hold a hearing on tax incentives for postsecondary education.  The hearing will take place on Thursday, May 1, 2008, in the main Committee hearing room, 1100 Longworth House Office Building, beginning at 10:00 a.m.

Oral testimony at this hearing will be limited to invited witnesses only.  However, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing.

FOCUS OF THE HEARING:          

The hearing will focus on various tax benefits currently provided for postsecondary education.  The Internal Revenue Code currently provides several tax benefits designed to encourage the pursuit of, and assist in the payment for, educational studies beyond the secondary level.  The hearing will examine the interaction of many of these benefits, the complexity associated with them, and whether these benefits can be simplified to make them more efficient and effective.   

BACKGROUND:

The complexity surrounding the Code has grown in recent years.  The laws that apply to tax incentives for postsecondary education do not escape these growing concerns.  The many education tax benefits come with complex rules that restrict how these products can be used separately and in combination with other similar benefits.  Some of these benefits may be more beneficial to taxpayers if saving begins when the child is young.  Such benefits include (1) the Coverdell education savings account; (2) a Section 529 college savings or prepaid  tuition-and-fee plan; (3) U.S. education savings bonds; and (4) penalty-free withdrawals from an Individual Retirement Account (IRA). 

Other tax incentives relate to the tax treatment of current educational expenses.  With respect to these benefits, the taxpayer must decide which benefit provides the greatest tax savings and without violating rules preventing “double dipping” between certain tax benefits. The available benefits are (1) the Hope Credit; (2) the Lifetime Learning Credit; (3) the deduction for tuition and fees; and (4) the deduction for interest on student loans.  One limitation of each of these provisions is that they do not benefit families who have no income liability.  In addition, many of the benefits are phased out for taxpayers with income above certain thresholds.  The complexity and interaction of these provisions can result in confusion and less than optimal choices by the taxpayer.  Thus, simplification of our current structure may be necessary to produce greater efficiency and increased access for taxpayers who need as much help as possible with rising college costs.                                                 

In announcing the hearing, Chairman Neal stated, "With more than ten million families claiming tax benefits to help finance higher education each year, Congress must ensure that these benefits work as intended.  This hearing will explore whether complexity in the current system means that families do not fully utilize these benefits, and provide recommendations for improvement.”

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

Please Note:  Any person(s) and/or organization(s) wishing to submit testimony for the hearing record must follow the appropriate link on the hearing page of the Committee website and complete the informational forms.  From the Committee homepage, http://waysandmeans.house.gov, select “110th Congress” from the menu entitled, “Committee Hearings” (http://waysandmeans.house.gov/Hearings.asp?congress=18).  Select the hearing for which you would like to submit, and click on the link entitled, “Click here to provide a submission for the record.”  Follow the online instructions, completing all informational forms and clicking “submit” on the final page.  ATTACH your submission as a Word or WordPerfect document, in compliance with the formatting requirements listed below, by close of business Thursday, May 15, 2008.  Finally, please note that due to the change in House mail policy, the U.S. Capitol Police will refuse sealed-package deliveries to all House Office Buildings.  For questions, or if you encounter technical problems, please call (202) 225-1721.

FORMATTING REQUIREMENTS:

The Committee relies on electronic submissions for printing the official hearing record. As always, submissions will be included in the record according to the discretion of the Committee. The Committee will not alter the content of your submission, but we reserve the right to format it according to our guidelines. Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response to a request for written comments must conform to the guidelines listed below. Any submission or supplementary item not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.

1.   All submissions and supplementary materials must be provided in Word or WordPerfect format and MUST NOT exceed a total of 10 pages, including attachments.  Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official hearing record.

2.  Copies of whole documents submitted as exhibit material will not be accepted for printing.  Instead, exhibit material should be referenced and quoted or paraphrased.  All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.

3.  All submissions must include a list of all clients, persons, and/or organizations on whose behalf the witness appears.  A supplemental sheet must accompany each submission listing the name, company, address, telephone and fax numbers of each witness.

Note:  All Committee advisories and news releases are available on the World Wide Web at http://waysandmeans.house.gov.

The Committee seeks to make its facilities accessible to persons with disabilities. If you are in need of special accommodations, please call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four business days notice is requested). Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above.

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