Audited over Scholarshare 529 withdrawals?

kluge
Fri, 18 Dec 2009 17:01:45 +0000

Thought I’d bring this forward to let you all know what happened. I sent a written response in to IRS explaining that the funds were withdrawn to cover collegiate room and board, in an amount less than the college’s stated cost of attendance, with documentation of the amounts. As predicted, IRS responded a couple of months later accepting the explanation. It seems like there’s no way for IRS to track these withdrawals and they (somewhat randomly) send out “bills” for the portion of the withdrawal which exceeds the initial amount deposited.