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Business and Policy Areas
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NACUBO Presses IRS for Relief from 1098-T Penalties

September 19, 2014

The Internal Revenue Service should stop issuing penalty notices to colleges and universities related to missing or inaccurate taxpayer identification numbers (TINs) on Forms 1098-T and waive penalties assessed for 2012, NACUBO President and CEO John Walda urges in a September 19 letter to the IRS.

In February, the IRS issued a blanket waiver for all such penalties assessed for tax year 2011, then last month it began sending out hundreds of similar penalty notices to colleges and universities, applicable to forms filed for tax year 2012.

"Given that Forms 1098-T for 2012 were all filed long before the proposed fine notices were issued for the 2011 tax year, and nothing has changed that should cause the IRS to come to a different outcome for 2012, it is unclear why the IRS is repeating the cycle this year," the letter states.

NACUBO's letter urges the IRS to:

  • cease sending 972CG notices for 2012 Forms 1098-T;
  • publish guidance reinstating forbearance on these penalties until a long-term solution has been identified;
  • revise the 1098-T filing process to allow filing institutions to affirmatively certify up front that they have "acted in a responsible manner" and met the waiver standards for soliciting TINs from students; and
  • revise the §6050S regulations to allow institutions to refrain from filing Forms 1098-T for students who fail to provide a TIN.

NACUBO is closely monitoring this issue and will keep members informed of any actions taken by the IRS. Until and unless there is an announcement from the IRS waiving 2012 penalties, colleges and universities that have received penalty notices should either request an extension of the 45-day period provided for response or proceed with filing a request for a waiver. In many cases, institutions will find that last year's waiver request can simply be updated and resubmitted. NACUBO Advisory Report 2013-1, prepared last year in response to the 2011 notices provides background information and guidance on responding to the IRS. 

Contact

Mary Bachinger
Director, Tax Policy
202.861.2581
E-mail