[19802WPT]

This is my first post after LOTS of reading on the topic.

My husband and I signed up with the adoption agency from hell in 2006. We paid them $10,775 to be accepted into their program. We were then eligible to be viewed by birthmothers for a potential match. Making a long story as short as possible.....the agency was found to be on the shady side. After a privacy breach where they leaked all of the families email addresses to all of the other families, we began to collectively come together to find out we had been ripped off. Many families were waiting (about 60) and very very few babies were available all of which had severe health concerns or drug/alcohol addiction at birth. The families came together and complained to the state Attorney General as well as the Better Business Bureau. All of those investigations are currently in the works. Lots of bad stuff has been uncovered in this agency. It is not enough YET to shut them down. We, along with 5 other families, were also on a 20/20 type investigative television news report regarding our story.

Here is my question....I need DESPERATELY to be able to take the adoption tax credit for the $10,775 we paid into this scam agency. Technically, we did not have a failed adoption. We were never matched by the agency. As I read the IRS publication about the credit, it says to treat these expenses exactly the way you would treat expenses for an adoption not finalized in the current tax year. Our expenses are all from 2006, so we presumably should be able to take the credit in the 2007 return.

Am I placing too much emphasis on the fact that we were never matched with a baby? I can't say that we paid expenses to a birthmother who changed her mind. We never had a solid match. The agency is a scam and it is probably going to eventually be closed.

What would you all do? Would you roll the dice and take the credit?

Thanks for your help!
Lisa