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Business and Policy Areas
Business and Policy Areas
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IRPAC Recommends Clarification on Reporting Issues

November 1, 2012

The recently released report of the Information Reporting Program Advisory Committee (IRPAC) includes recommendations to the IRS on several issues of interest to colleges and universities, including Form 1098-T; the new Form 1099-K; withholding on nonresident aliens and foreign entities; information return corrections, and other tax administration issues.

The IRPAC is a federal advisory group comprised of members from the tax professional community that provides input to the IRS on relevant information reporting issues. NACUBO is represented on IRPAC by Anne Jetmundsen, tax advisor at University of South Florida and member of NACUBO's Tax Council. Anne serves on the Emerging Compliance Issues subgroup of IRPAC, which has made most of the recommendations relevant to campus tax administrators.

IRPAC made recommendations on numerous issues, including the following of interest to colleges and universities:

  • Corrections on Form 1099 (found beginning on page 41 of the report)
  • Code Section 6050W and the new Form 1099-K (page 47)
  • Form 1098-T, Tuition Statement (page 50)
  • Employer and insurer reporting under the Affordable Care Act (page 24)
  • Electronic furnishing of Form 1042-S (page 54)

Helping Students Understand the 1098-T.

The recommendations related to Form 1098-T respond, in part, to suggestions NACUBO received from bursar's offices and tax administrators at member institutions. They are aimed at providing clearer instructions to students and taxpayers as they work through the process of determining eligible payments for the American Opportunity Tax Credit. IRPAC recommended that a new section be added to Publication 970, Tax Benefits for Education, explaining the 1098-T and cautioning taxpayers that the amounts they paid may differ from what is reported on the form. A similar warning would be added to the instructions for Form 8863, the form that taxpayers file to claim the credit. Reporting veterans benefits in Box 5 of the 1098-T should be addressed in the 1098-T instructions, according to the IRPAC report. Finally, the group recommended that IRS communicate with tax-preparation software companies regarding the appropriate use of the numbers reported on Form 1098-T. NACUBO anticipates IRS will incorporate IRPAC's recommendations into the 2012 forms and publications in order to assist taxpayers at the earliest opportunity.

Contact

Mary Bachinger
Director, Tax Policy
202.861.2581
E-mail