In the 1980 election year, Cngress is likely to provide taxpayers with some form of tax savings, and observers predict that legislators will begin efforts to modify the Internal Revenue Code to provide more equity, gather more revenues, and serve a number of other purposes that will affect the higher education community. Particularly, higher education institutions will seek to preserve and broaden the provision that allows charitable contributions to colleges and universities to be deducted in calculating a donor's income tax. In addition, they have a strong interest in maintaining the tax-exempt status of scholarships and fellowships (Section 117). Tuition remission, presently regarded as tax-exempt, may be vulnerable during the tax review process. The concept of tax expenditures is fundamental to the arguments on tax reform. Legislative history, cultural values, and current politics argue against any wholesale reform of the tax code, and yet piecemeal efforts to alter the code have been made and will continue. The higher education community views these efforts with concern, but has a powerful ally in other special interest groups, particularly in the nonprofit sector, that are also interested in encouragement of charitable giving. (Author/MSE)