Melissa L. Moloney - Page 8

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               Section 108(f) for further guidance of the intent of                   
               that section, it states:                                               
                    In order to ensure the professional participation                 
                    in public service activities, many educational                    
                    organizations sponsor programs which offer stu-                   
                    dents an opportunity to be discharged (partially                  
                    or completely) from their student loans, by work-                 
                    ing for a period of time in a public serviced                     
                    organization.  (CCH--Standard Federal Tax Reports                 
                    � 7002, * * *)                                                    
               Both Internal Revenue Code Section 108(f) and the LARP                 
               award an individual for working in a public service                    
               organization in lieu of working in the private sector.                 
               * * * the language of the Section [108(f)] must be                     
               examined for guidance.  It says “In general....gross                   
               income does not include....any amount....if such dis-                  
               charge was pursuant to a provision of such loan...”                    
               (IRC Section 108(f)).  The use of the phrase “in gen-                  
               eral” in and of itself implies that the rule is the                    
               general rule but not exhaustive of all situation to                    
               which 108(f) can apply.  The language allows for pro-                  
               grams, such as the Janet L. Hoffman LARP, to fall                      
               within the Code Section without the Section requiring                  
               rewriting.  Nowhere in Code Section 108(f) does the                    
               language state that the discharged amount must be                      
               pursuant to a provision in the loan (emphasis added).                  
                    Due to the fact that the language purposefully is                 
               not exact, allowing for other possible programs, pro-                  
               grams which may not have been in existence when the                    
               Code Section was drafted coupled with the CCH Explana-                 
               tion and requirements of the Janet L. Hoffman LARP, it                 
               is Petitioner’s position that the award received                       
               through the LARP should be treated as a discharge of                   
               indebtedness and therefore non taxable income.  The                    
               very spirit of 108(f) is to ensure that professionals                  
               participate in public service employment rather than                   
               working in the private sector.  This is advanced by the                
               Janet L. Hoffman Loan Assistance Program’s award of                    
               money, which is directly applied to Petitioner’s enor-                 
               mous student loan debt.  Although Petitioner certainly                 
               received a benefit by receiving the award, so too the                  
               State of Maryland benefits by ensuring professional                    
               participation in public service activities such as                     
               working for the State’s Attorney’s Office.  The lan-                   

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Last modified: May 25, 2011