In an Aug. 2025 report, the U.S. Government Accountability Office (GAO) is suggesting that IRS develop a comprehensive educational outreach plan for tax credits that covers identifying key stakeholders while establishing clear and consistent messaging. IRS agreed with GAO’s recommendation.

GAO explained that In the U.S., with more than 100,000 children are adopted annually. Over half of adoptions are done via the public foster care system. Individuals pay thousands of dollars in expenses to adopt. In 1996, the adoption tax credit was established to encourage adoptions by make up for related costs.

The agency was asked to review IRS’s administration of tax credit adoption. The report reviews IRS’s outreach to educate individuals on the availability and requirements to claim the adoption tax credit, and the frequency and results of audits IRS did on the adoption tax credit for tax years 2012 through 2021.

GAO examined IRS’s education efforts on the adoption credit and interviewed relevant officials. The agency also interviewed a nongeneralizable sample of seven adoption stakeholders such as state adoption and foster care agencies and nongovernmental organizations,.

These include those that offer tax and legal assistance for adoptive families. GAO also reviewed the results of adoption tax credit audits for tax years 2012 through 2021 with the most current data available.