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Business and Policy Areas
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IRS Waives Penalties for Missing TINs

August 28, 2015

Updated January 11, 2016:

On January 7, 2016, the IRS announced that it will not impose penalties for the 2015 calendar year because it is unable to make necessary programming and form changes to implement section 6724(f) with respect to Forms 1098-T for the 2015 calendar year. The notice states, “The IRS, therefore, will not impose penalties under section 6721 or 6722 against an eligible educational institution that timely files or furnishes 2015 Forms 1098-T or statements with missing or incorrect TINs during 2016. This penalty relief does not apply to other failures subject to a penalty under section 6721 or 6722, such as failure to file 2015 Forms 1098-T timely, or a failure to include all of the other information required to be included on the Form 1098-T.”

The following letter was sent to NACUBO primary representatives and chief business officers from John Walda, NACUBO President and CEO:

Dear Colleague,

I am writing to share great news from the Internal Revenue Service. As you know, for the last two years we have been urging the IRS to waive penalties and to suspend the cumbersome and poorly administered enforcement program penalizing institutions for reporting missing or inaccurate taxpayer identification numbers (TINs) on Forms 1098-T. I am happy to report that today the IRS agreed to waive penalties assessed against colleges and universities for tax year 2012 and will refrain from issuing penalties for tax years 2013 and 2014.

In a letter from the IRS, the Service explains that "for tax year 2012, each educational institution that was previously assessed such penalty will receive a letter from the IRS informing them of the IRS' decision.  Affected institutions that do not receive a letter by Oct. 1, 2015, should respond to the IRS using the original penalty assessment notice."

As we reported earlier this summer, provisions in the recently enacted Trade Preferences Extension Act of 2015 will enable higher education institutions to avoid receiving automatic penalties for missing TINs by certifying at the time of filing that they have met the appropriate solicitation standards. The measure goes into effect for statements furnished after December 31, 2015.

Last month, I sent a letter to the IRS seeking a blanket waiver for 2012 penalties and suspension of the penalty program until further guidance is developed implementing the new procedures.

We could not have anticipated a more positive response from the IRS.  I would like to acknowledge the role that many NACUBO members played in helping us address this issue.  Many of you, working with staff members Mary Bachinger, Liz Clark, and Anne Gross, provided support and advice and helped us make our case to the IRS and to Capitol Hill. We are grateful for your volunteer engagement and commitment to work on an issue that impacts institutions nationwide.

NACUBO will report any further information in our biweekly newsletter, Current, and online at our IRS Form 1098-T resource page. Please contact NACUBO staff Mary Bachinger or Anne Gross with any questions or concerns.  

 
Best regards,

John D. Walda
President and Chief Executive Officer

Contact

Anne Gross
Vice President, Regulatory Affairs
202.861.2544
E-mail

Mary Bachinger
Director, Tax Policy
202.861.2581
E-mail