Starting with a non-authoritative source, I first read the FedLoan Servicing website which states the following:
Are loan amounts forgiven under PSLF considered taxable by the IRS?
No. According to the Internal Revenue Service (IRS), student loan amounts forgiven under PSLF are not considered income for tax purposes. For more information, check with the IRS or a tax advisor.
That seemed simple enough. Now onto the authoritative sources, starting with IRC §108(f)(1) which states the following:
(f) Student loans
(1) In general
In the case of an individual, gross income does not include any amount which (but for this subsection) would be includible in gross income by reason of the discharge (in whole or in part) of any student loan if such discharge was pursuant to a provision of such loan under which all or part of the indebtedness of the individual would be discharged if the individual worked for a certain period of time in certain professions for any of a broad class of employers.
Well, what are these "certain professions"? One answers seems to have been provided in a Tax Court Summary Opinion which deals with IRC §108 (Moloney, T.C. Summ. 2006-53) which states:
The term “certain professions” to which sec. 108(f)(1) applies are medicine, nursing, and teaching. Porten v. Commissioner, T.C. Memo. 1993-73 n.1 (citing Staff of Joint Comm. on Taxation, General Explanation of the Revenue Provisions of The Deficit Reduction Act of 1984 at 1999(J. Comm. Print 1984)).
Accordingly, is the ability to exclude the debt forgiveness from income solely limited to taxpayers working in the fields of medicine, nursing, and teaching, or am I missing some authoritative guidance which expands the scope of IRC §108(f)(1) beyond these three professions?
Any help is greatly appreciated!