The General Accounting Office examined employer-provided educational assistance. The study focused on educational assistance provided under section 127 of the Internal Revenue Code (which allows employees to exclude employer-provided educational assistance from their gross income), characteristics of employers providing educational assistance and employees eligible for/receiving educational assistance, and other pertinent tax provisions. Data were complied from the Internal Revenue Service (IRS), the Department of Education's National Postsecondary Student Aid Study, and the Department of Labor's Bureau of Labor Statistics reports. According to IRS data, employers annually filed more than 3,200 returns reporting information about educational assistance provided to employees under section 127. The total dollar amount of employer-reported section 127 educational assistance increased from $525.3 million for 1992 to $691.3 million for 1994. IRS data further showed that approximately 900,000 employees received employer-provided educational assistance annually in 1992-1994. Few employees eligible for educational assistance under section 127 actually received it, however. Three tax provisions besides section 127 were identified and discussed. (Fourteen tables/figures are included. Appended are the following: examples illustrating IRS' determination of deductibility of job-related educational expenses as business-related expenses; technical study methodology information; additional information about employees; and list of major contributors to the report.) (MN)