Pursuant to a congressional request, GAO reported on employer-provided
educational assistance between 1992 and 1994 under section 127 of the
Internal Revenue Code (IRC), focusing on: (1) the characteristics of
employers providing educational assistance, such as the number of
providers and their size; (2) employees eligible for and receiving it,
such as the number of recipients and their level of study; and (3) other
tax provisions related to employer-provided educational assistance and
the differences between them and section 127.
GAO found that: (1) according to IRS data, employers annualy filed over
3,200 returns that reported information about educational assistance
they provided their employees during 1992 through 1994; (2) employers
filing returns varied in size, type of business, and amount of
assistance provided; (3) large employers, those employing 250 or more
employees, provided 99 percent of the dollar amount of the reported
assistance to 98 percent of the employees who received it; (4) IRS data
showed that about 900,000 employees received employer-provided
educational assistance annually during 1992 through 1994, but few
employees eligible for educational assistance under section 127 actually
received it; (5) according to National Postsecondary Student Aid Study
data, 74 percent of employees receiving educational assistance in
academic year 1992 to 1993 were undergraduates, and about 64 percent of
the undergraduates who identified their occupation were in clerical or
technical occupations; (6) of employees receiving assistance who were
graduate students and identified their occupation, about 89 percent were
in professional, managerial, administrative, or teaching occupations;
(7) generally, four tax provisions apply to employer-provided
educational assistance; and (8) the major differences between section
127 and the three other provisions are related to the type of education
supported, employee eligibility, limits on the value of assistance
provided, and the ease of administration.
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