IRS doesn't even use the 1098-T form correctly...

[b_s_Bowser]

<p>[Treasury</a> inspector says Hope Credit gave away hundreds of millions improperly | AccountingWEB.com](<a href=“http://www.accountingweb.com/topic/tax/treasury-inspector-says-hope-credit-gave-away-hundreds-millions-improperly]Treasury”>http://www.accountingweb.com/topic/tax/treasury-inspector-says-hope-credit-gave-away-hundreds-millions-improperly)</p>

<p>This worries me a lot.</p>

<p>

First, the IRS does not have math error authority to immediately disallow claims for the Hope Credit for the same student for more than two years. The IRS can and does examine returns that claim Hope Credits after the refunds are issued, but the criteria the tax agency uses are not sufficient to identify the vast majority of errors.

</p>

<p>

Even so, TIGTA was informed that the IRS does not use the information on Forms 1098-T in its matching program, and does not accept Form 1098-T as proof of educational expenses.

</p>

<p>This was found out Sept 2009. I am sure it will take the IRS a while to catch up. Wow, just wow.</p>

[arabrab]

<p>I was trying to think if it was possible to design a less useful tax form that the 1098-T, and I couldn’t come up with one.</p>

<p>I suspect that there was major pushback from schools on the complexity involved in generating a 1098-T that actually reflected the pertinent information, much like brokerages fought having to report basis for a long time.</p>

[b_s_Bowser]

<p>I would hope so. I am fortunate that my school actually uses the form in a way that makes sense (school bills me/disperses aid all within the CALENDER year, so the data would match up no matter how I did it).</p>

<p>(Digressing here)
Also, I feel colleges should give college students and their families a heads up about the possibility of their financial aid being taxable. I’ve talked to lots of people who didn’t realize their scholarships could be taxed until recently. Heck I was one of them (thank you Google!). I have been scrambling for weeks collecting billing statements to make sure I didn’t owe anything and thankfully my aid money was taxable this year (2009) and last year (2008).
(end digression)</p>

[swimcatsmom]

<p>Not surprising at all. The 1098 is a form that is inconsistent from one school to the next. This link in the CPA journal has some interesting stuff about it.
[Navigating</a> the Form 1098-T Tuition Statement: Inconsistencies in Reporting](<a href=“Find Your Page | The New York State Society of CPAs”>Find Your Page | The New York State Society of CPAs)</p>

[b_s_Bowser]

<p>swimcats I saw that link too. I am glad I got a printout of my billing statement for the entire time I have been in school…just in case of the A-word (audit =P ). Taxes are just too confusing sometimes.</p>