Last month, I blogged the IRS’s issuance of Rev. Rul. 2008-34, which clarifies that law school public interest loan forgiveness programs qualify for the § 108(f) exception (and, as a result, students need not report the forgiven interest as discharge of indebtedness income):

• IRS Blesses Law School Student Loan Forgiveness Programs (6/20/08)
• Aprill: Legislation Needed to Exclude All Student Loan Forgiveness From Income (6/23/08)

The National Law Journal picks up the story in IRS Clarifies Rule on Taxing Forgiven Loans, by Lynne Marek:

Law schools that were concerned their students might have to pay taxes on loans that are forgiven received some reassurance from the IRS last month that students don’t have to claim the erased loans as income.

In a IRS revenue ruling, the agency clarified that the privilege of not claiming the erased loans as income doesn’t apply only to students who go into the nursing, medical and teaching professions, as suggested by a 2006 tax court opinion, but rather also includes the legal profession.

Specifically, the IRS clarification says that a law school graduate can work for a public interest or community service organization, a legal aid office or clinic, a prosecutor’s office, a public defender’s office or another local, state or federal government office and qualify for avoiding taxes on the loan write-off.