These comments address the administrative framework for the new tax credit scholarship created by the “One Big Beautiful Bill” under § 25F. While this tax credit goes beyond the role of the federal government and should not have been created, it is crucial that the implementation does not further overstep. The rules should not allow the federal government to set parameters around what kinds of schools scholarship-granting organizations (SGOs) can let parents pick based on such things as their enrollment policies or teachings. As the notice acknowledges, it is also important that all SGOs that meet the § 25F(c)(5) statutory requirements be allowed to participate, rather than states imposing further restrictions.

On the specific requests for comment in the notice, Treasury should:

  1. Adopt a light-touch administrative model relying on self-certification and IRS audit authority rather than imposing burdensome verification requirements; and
  2. Permit multi-state SGOs to allocate contributions among their listed states through organizational designation rather than requiring donor designation at the time of contribution;
  3. Interpret statutory requirements in ways that enable efficient SGO operations while maintaining accountability through established tax enforcement mechanisms.

This approach would honor the statutory text, draw on proven federal tax administration precedents, align with existing state scholarship programs, and enable SGOs to operate effectively while ensuring compliance.