IRS Sending Penalty Notices for 1098-Ts Without Taxpayer Identification Numbers
August 8, 2013
Internal Revenue Service regulations §1.6050S-1 require colleges and universities to annually submit to the IRS Forms 1098-T for certain students, with or without a Taxpayer Identification Number (TIN). For most students, this is their Social Security number. NACUBO has heard from a number of institutions that have received 972CG notices from the IRS, penalizing them for doing precisely that and submitting Forms 1098-T that do not include the student's TIN.
If they do not already have students' TINs, the regulations require institutions to annually solicit TINs from enrolled students for whom they need to generate Forms 1098-T. (Institutions do not need to report on continuing education students or nonresident aliens, unless specifically requested to do so.)
How to Respond to the IRS
If your institution has received an IRS penalty notice and you can demonstrate that you have solicited TINs in a "responsible manner" in accordance with the rules, penalties should be waived. The regulations spell out that the institution must request the TIN in writing, clearly notifying the student that the law requires the individual to furnish a TIN for inclusion on an information return. Requests made on Form W-9S, Request for Student's or Borrower's Taxpayer Identification Number and Certification, satisfy the requirement, as does a separate form or request incorporated into other forms customarily used by the institution, such as admission or enrollment forms or financial aid applications.
When following the instructions appearing on the penalty notice, in addition to an explanation for the missing TINs (i.e., they were for students who did not furnish TINs), attach a copy of the W-9S or other correspondence or format you use to annually solicit TINs. Also include any other information that demonstrates your institution's compliance with the §1.6050S regulations.
NACUBO has asked IRS national office staff about the rationale for the penalty notices and will report on any further insights or information when received.
Director, Tax Policy
Vice President, Regulatory Affairs
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