If I was charged with a felony conspiracy, not a felony possession charge, will I still be able to claim the American Opportunity Tax Credit?

[bat1189]

My lawyer in court told me that a conspiracy charge is not the same as a drug possession charge.

[SundayInSalem]

You have to be convicted of a felony drug charge to be ineligible for the American Opportunity Tax Credit. If you were charged, but not convicted, then you still qualify.

The IRS says, “Students must have no felony drug convictions as of the end of 2020.”

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[DawnC]

Conspiracy charges can come in felony or misdemeanor forms, and people charged with conspiracies could potentially be subject to both a conspiracy charge and a charge of the underlying crime at issue.   This is not a legal forum, so your lawyer can advise you best as to what your charges are or are not.   As far a claiming education credits on your tax return, the following is a requirement of claiming the American Opportunity Tax Credit:

• Not have a felony drug conviction at the end of the tax year 

No charge alone disqualifies you, only a conviction of a drug charge.  

[bat1189]

Hi, 

Yes, I was convicted. But my question is about the difference between conspiracy and drug possession. I was convicted of conspiracy. I have that on my record. But not possession. I was not convicted of drug possession. My question is for the AOTC, does the IRS consider conspiracy a drug possession charge? (in the penal code they are in separate sections)

[ToddL99]

No, a felony conspiracy conviction would not disqualify you for the American Opportunity Tax Credit.

Publication 970 Tax Benefits for Education defines "felony drug conviction" as a "felony for possessing or distributing a controlled substance" (Table 2-1, Page 11). 

"Conspiracy" and "possession/distribution? are two distinct crimes. You can conspire to "possess or distribute a controlled substance", without ever doing so.  You can also be convicted of conspiracy to commit a crime without committing the crime itself.

[Malcolm Thomas]

Thanks a lot for the explanation. It is very important to discuss this issue in terms of violation of not only personal rights but also general security in general. Increasingly, I read various articles on the site https://paperap.com/free-papers/crime/ that are related to crime and crime. I understand that a lot depends on each of us and on the honesty of each of us. We must be more tolerant, fairer, and kinder towards each other.

[manhatt3n]

I was also charged with a felony conspiracy to possess a controlled substance about 15 years ago. I know this tread is old but were you able to get the tax credit. I would like to apply for it this year but am unsure if my previous conviction will disqualify me. 

[SusanY1]

If you were convicted of a drug-related felony, you are not eligible for the credit. 

Misdemeanor convictions or charges that do not result in convictions would not disqualify an individual from this credit.  

You may still be eligible for the Lifelong Learning Credit, which does not have the requirement that the student have no felony drug convictions.

[manhatt3n]

ToddL99 who also replied on this thread says differently. Is there any sources tax confirm or deny the eligibility based off its conspiracy charge? Does the IRS run a background check for individuals applying for the credit?

[Mike9241]

the denial of the AOTC  for conviction on a felony drug charge is contained in IRC 25A(b)(2)(D)

(D)Denial of credit if student convicted of a felony drug offense
The American Opportunity Tax Credit under subsection (a)(1) shall not be allowed for qualified tuition and related expenses for the enrollment or attendance of a student for any academic period if such student has been convicted of a Federal or State felony offense consisting of the possession or distribution of a controlled substance before the end of the taxable year with or within which such period ends.

[mssandra]

What about a paraphernalia charge? By that definition it’s not a drug charge?

[Vanessa A]

Was it a felony or misdemeanor?

If it was a felony, it would still exclude you as it is a drug paraphernalia charge if it was a FELONY charge.  Any type of FELONY drug charge excludes you from taking the American Opportunity Tax Credit. 

If it was a misdemeanor charge, then it would not exclude you from take the AOTC.

(Edited 3/7/24 @5:44AM) @mssandra

[manhatt3n]

The information provided by the “Tax Expert” is false! A drug paraphernalia charge would not exclude anyone from the AOTC. A drug paraphernalia charge is an ungraded misdemeanor. No where in the USA is it ever a classified as a felony. It be nice if people considered the questions asked in this forum before they respond so others are not mislead.