Tax Policy

Insufficient Information to Assess Effect of Tax Free Education Assistance Gao ID: GGD-89-76 June 23, 1989

Pursuant to a congressional request, GAO: (1) evaluated data that the Department of the Treasury used to assess the effect of section 127 of the Internal Revenue Code; and (2) assessed the availability and reliability of 11 data elements relating to section 127.

GAO found that: (1) in June 1988, Treasury concluded that section 127 should not be extended; (2) in reaching its conclusion, Treasury relied on information that, although the best available, was insufficient to support its conclusion, since the data came from surveys that were not specifically focused on gathering data to evaluate the success of section 127, had low response rates, or were not representative of the population being surveyed; (3) in 1984, Congress enacted a reporting requirement to provide a basis for assessing the section, but the required information was not sufficiently specific; and (4) the 11 data elements would be useful in assessing the section, but none of them were available from reliable sources.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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