<p>As the title states, my main point in my financial aid appeal letter will be the sales tax audit review that my parents are burdened with and I was wondering if anyone thinks that will help me get more money in my financial aid package. The definition of a sales tax audit is when a business is selected to be reviewed of all the taxes that should be owed and how much are actually paid. The tax people review all of the business’s history and checks is everything is up to date. However, a majority of the time, businesses are always to completely perfect in their paid taxes and suffer a financial penalty that is a great sum of money. I know I should try regardless, but I want to know if that is a point that should be emphasized.</p>
<p>I know this is such a dull topic but any feedback would be appreciated greatly.</p>
<p>A future event (owing money for unpaid taxes) that might happen is not a strong reason to appeal your financial aid package. However, you may want to have a plan ready if and when money is owed.</p>
<p>I can’t see a college giving you more money now because you “might” need it in the future.</p>
<p>Okay, I think I’ll add a document that further explains the circumstances in the actual appeal. I didn’t clarify but we have been in the review for a while now and we are in the last stages of the audit. Thank you for your feedback, I’ll be sure to clarify in the actual letter.</p>
<p>If your parents end up owing back taxes after the audit, FA is not going to give you more money. If they did, they’d essentially be helping your parents pay their back taxes, and schools don’t do that.</p>
<p>If your parents end up owing a large amount of back sales tax, it was because they weren’t collecting and paying sales tax properly. This could have been accidental, because they didn’t understand something, or in some cases on purpose (which is tax fraud - I am NOT accusing your parents of this). No matter what the reason is - I doubt any school will take not doing sales taxes correctly as a reason for needing more aid.</p>
<p>I would keep quite. Any additional taxes due will reflect in the income of the business. That will help you in the subsequent year. If you tell them about it, then they might adjust the difference out as a one-time expenditure that will not reoccur in the future year.</p>
<p>Or, if they have to restate the expense/income of the prior years, then that would help in the current year.</p>
<p>In general, you can usually get one-time items adjusted (like if your parents won $10,000 in a lottery). In your case, you are asking for a one-time expense to be adjusted. the one-time expense is in your favor, so you don’t want it adjusted. But, if it results in a significant annual change, then that might be worth reporting.</p>
<p>I doubt that owing sales tax and related underpayment penalties would be a reason for an appeal. Sales tax is money collected and held by the business as a sort of agent for the taxing authority. The money did not belong to the business in the first place. </p>
<p>Sales tax a business charges and collects on behalf of the State are not an expense to the business and it, and any penalties for underpayment, are not allowable deductions for Federal taxes. The only thing I can see here is that if income for the related period was overstated (because sales tax was included wrongly as part of the business’ income), then that income would go down. But if it is for tax years other than 2012, I would be surprised if a school would consider it a reason to adjust the FA.</p>
<p>Okay, thank you everyone for your advise. I guess I will have to leave that part out of my letter. Better safe than sorry.</p>
<p>okay i read over the paragraph i wrote over the audit. what if i argued that the payment would reduce my family’s income this year? and i am positive my parents are going to have to pay the audit not the state</p>
<p>It hasn’t happened yet. No school is going to increase your FA based on a possible future event. But, heck . . . there’s no reason you can’t make the argument. You never know - maybe someone will decide it’s a good reason!</p>
<p>* and i am positive my parents are going to have to pay the audit not the state
*</p>
<p>? What does that mean? “not the state”??</p>
<p>You can write and talk to financial aid and let them know that your family is facing an expensive tax audit that is going to severely impact earnings this year. Things like that happen often, and the financial aid office can tell you how they handle these sort of things.</p>
<p>A family I know had a member undergo a bone marrow transplant for which they had to pay a large chunk. Financial aid did give some quarter for the expenses and lost income that was suffered, but I don’t think it was reduction a dollar for dollar reduction, and really not a whole lot. THat there was lost income was to be taken into account the FOLLOWING year when that year’s income is examined, for the most part. THis year’s aid is based on 2012 income. So your family will get the benefit of the income reduction next year when they file the financial aid papers, if this is a school that meets full need. If not, even then it could make little or no difference other than a lower EFC that might qualify you for federal money.</p>