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Press Release (May 9, 2001)

For more information, contact
Suellen Galbraith (703-535-7850)
ANCOR Director for Public Policy

Provide Fairness and Simplification in Tax Treatment of
Foster Care Payments

ANCOR URGES WAYS AND MEANS COMMITTEE
TO ADOPT H.R. 586

Washington, D.C., May 9, 2001: The American Network of Community Options and Resources (ANCOR) applauds the efforts of Chairman Bill Thomas (R-CA) and Representative Ron Lewis (R-KY)—sponsor of H.R. 586—for bringing this important bipartisan legislation forward for a full Committee markup. H.R. 586 would amend the Internal Revenue Code of 1986 to provide that the exclusion from gross income for foster care payments shall also apply to payments by qualified placement agencies.

ANCOR is a national organization representing over 760 private providers of supports and services to more than 150,000 people with mental retardation and other disabilities. Many states and localities have turned to ANCOR members to arrange for and supervise foster care family services to children and adults with disabilities.

Foster care families bring children and adults into their own homes to live as family members. These foster families have proven their efficacy when compared to institutional services and are a growing choice not only of state and local governments, but also individuals who benefit from support in a home environment and of the families of such individuals. In addition to meeting the preferences of some individuals with disabilities and providing cost-effective, community living alternatives to higher institutional care, foster care families help the nation meet a growing crisis—the shortage of long term care workers.

While States and localities across the United States have turned to private agencies as placement agencies and to provide the foster care payments for children and adults with disabilities, current tax law creates disparate treatment of payments received by some foster care families. No rational basis exists for this inequity.

H.R. 586 will simplify the current rules for the payment of foster care payments and provide uniformity, fairness, and simplification for the exclusion of foster care payments paid to families—regardless of the age of the foster care individual or whether the state or political subdivision works with a licensed/certified private agency to make the placement and payments.

ANCOR thanks Representative Ron Lewis and the nearly 50 cosponsors of H.R. 586 and supports their efforts to bring tax fairness, uniformity, and simplification to the nation’s foster care families. ANCOR urges the Committee to pass H.R. 586 today and calls upon Congress to include H.R. 586 in final tax relief legislation enacted this year.