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Business and Policy Areas
Business and Policy Areas
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NACUBO Seeks Relief from 1098-T Penalties for 2012 and Beyond

May 2, 2014

In an effort to avoid another round of penalty notices to colleges and universities this year (for the 2012 tax year), NACUBO has asked the Internal Revenue Service to issue guidance that would waive penalties for colleges and universities that file Form 1098-T with incorrect or missing taxpayer identification numbers (TINs).

The April 29 letter provides the background on current procedure and explains that institutions are unable to compel students to provide TINs, much less require them to provide accurate TINs. The reporting regulations, however, require colleges and universities to file the Form 1098-T for students, regardless of the presence or accuracy of the TIN. The letter therefore urges IRS to discontinue generating penalties to institutions until a long-term solution has been found, such as allowing institutions to access the IRS TIN-matching system or revise the filing process to include a verification statement whereby the institution may avoid penalties by certifying up front that information provided on the Form 1098-T is true, accurate, and complete.

Update on 2011 Penalty Waivers

IRS previously announced that proposed penalties for the 2011 tax year would be waived. However, it seems to be taking the agency some time to get official notices out to affected colleges and universities. To date, NACUBO has heard that official IRS letters granting waivers of 2011 penalties have been received by only a few institutions, while many more continue to receive letters acknowledging their request for a waiver and that 30 or 60 more days are needed to process their request. We anticipate that more waiver confirmations will go out from IRS in the coming weeks.

Contact

Mary Bachinger
Director, Tax Policy
202.861.2581
E-mail

Anne Gross
Vice President, Regulatory Affairs
202.861.2544
E-mail