The Internal Revenue Service should closely examine the complexities associated with requiring institutions to report amounts paid for qualified tuition and expenses in Box 1 of Form 1098-T and should offer the regulated community and taxpayers meaningful guidance prior to implementing the change, NACUBO President and CEO John Walda urged in a February 29 letter.
On December 18, 2015, the Consolidated Appropriations Act amended the Internal Code to remove the option for colleges and universities to report amounts billed for qualified tuition and expenses in Box 2. Mandated Box 1 reporting, according to the new law, is effective for 2016 forms that will be filed in early 2017.
Written in collaboration with NACUBO's Student Financial Services and Tax Councils, NACUBO's letter urges the IRS to:
- Develop guidance for filing institutions that acknowledges and accommodates the realities of tax year reporting of information that is tied to academic periods.
- Delay the implementation of mandatory reporting in Box 1, allowing filing institutions time to feasibly implement and test systems.
- Publish easy-to-understand, web-based resources to help taxpayers with the transition.
In response to NACUBO's February 9 Advocacy Alert, dozens of institutions have already sent letters to the IRS seeking delayed implementation of the new reporting rules. If your institution has not done so already, we encourage you to voice your concerns directly with the IRS.
Please share a copy of your institution's letter with us at firstname.lastname@example.org.