Time to end the international adoption tax credit

by Peter Dodds

Sequestration will slash more than $1 trillion in government programs over the next 10 years with roughly $85 billion slated for 2013. Critical services are being slashed and Americans are suffering. Yet the lavish international adoption tax credit providing a financial bonus to parents who adopt foreign children sails unscathed through the financial storm.

In 1996, the Adoption Promotion and Stability Act was introduced in Congress to help families defray adoption costs and to promote the adoption of foster care children. This policy was aimed at serving America’s abandoned and abused children with the noble goal of placing them in permanent families via adoption.

But over the years the adoption tax credit has moved away from its original intent and been sidetracked to promote international adoption. Sequestration serves as a spotlight illuminating the need to eliminate the tax credit for international adoption. Four reasons to end the policy of rewarding parents who go offshore to adopt:


Overburdened American taxpayers should not be required to subsidize parents who make a choice to adopt outside the United States. Unlike government programs designed to assist those who, through no fault of their own need assistance, this tax credit is a financial windfall for those who chose to adopt from abroad. Rather than offering a hand-up to those in need, the tax credit for international adoption is an unnecessary government handout to those satiating their desire to parent. Taxpayers are left to pick up the tab.


Adopting foreign children is expensive. The US Bureau of Consular Affairs reported that agencies charged prospective parents up to $64,357 for processing an international adoption in 2011. In comparison, foster care adoptions are minimal or at no cost.

The international adoption industry recognized their prices were beyond the reach of most Americans. To stay in business the industry lobbied Congress on two fronts. First, by the year 2012, the maximum amount of the credit was increased to a generous $12,650.

Second, the industry lobbied Congress to expand the tax credit to include those with hefty incomes of up to $229,710. Today, nearly 90 percent of the adoption tax credit filers with incomes above $100,000 adopted internationally or privately. Parents can deduct luxury expenses like reimbursement for airline tickets to foreign countries, as well as hotels and meals while in country.

Hard earned public dollars are being spent on wealthy jetsetters who fly around the world and pick up kids to fulfill their parenting desires. The policy of reducing the tax obligation for the well to do who make an expensive choice to adopt internationally is paid for on the backs of hard-working, lower- and middle-income taxpayers.


“Saving children” is a rallying cry of international adoption advocates. But their slogan rings hollow because 100,000 abandoned and abused foster care children wait to be adopted. The original intent of the adoption tax credit was to promote the adoption of foster-care children. Unfortunately, the vast majority of credit recipients are for international or private adoptions, not foster care adoptions. More than 82 percent of the total adoption tax credit goes to parents who adopt privately or from foreign countries.

Hundreds of thousands of abused and abandoned children in the United States languish in the foster care system. These children need permanent families but there’s little money to be made in foster care adoption. Thus, the agencies focus their efforts on the lucrative international market at the expense of the 100,000 American children in desperate need of permanent families.

The international adoption tax credit works against foster care children because it creates a financial incentive for Americans to adopt from foreign countries. A tax break that rewards adopting parents for pushing aside foster care children is a really bad idea.


International adoption has a lengthy, ongoing and documented pattern of adoption agency corruption, baby stealing, child trafficking, coercion of the biological parents and legal violations. The corruption and abuse are so widespread and pervasive that nearly half the 40 countries listed by the US State Department as the top sources for international adoption from 1995 through 2008 temporarily halted adoptions or were prevented from sending children to the United States.

Every few weeks another scandal breaks illuminating the sleaze that is all part and parcel of this system as detailed by the Schuster Institute for Investigative Journalism, which has been releasing detailed reports since 2008. The tax credit for international adoption rewards a system unable to clean up its act.

Now is the time to eliminate the tax credit for international adoption and stop appropriating taxpayer money to reward wealthy parents choosing to adopt from overseas at the expense of America’s foster care children.

Peter Dodds was adopted from a German orphanage by American parents.

His memoir, Outer Search Inner Journey, is the first book written on international adoption by a foreign born adoptee. !