In a September 19 letter to the Internal Revenue Service, NACUBO President and CEO John Walda urged the IRS to stop issuing to colleges and universities penalty notices related to missing or inaccurate taxpayer identification numbers (TINs) on Form 1098-T and waive penalties assessed for 2012.
In February, the IRS had issued a blanket waiver for all such penalties assessed for tax year 2011. Then in August, it began sending out hundreds of similar penalty notices to colleges and universities, applicable to forms filed for tax year 2012.
Walda stated in the letter, “Given that Forms 1098-T for 2012 were all filed long before the proposed fine notices were issued for the 2011 tax year, and nothing has changed that should cause the IRS to come to a different outcome for 2012, it is unclear why the IRS is repeating the cycle this year.”
Requested IRS Revisions
In the letter, Walda urged the IRS to take several actions to improve the processes related to Form 1098-T, including:
- Cease sending 972CG notices related to the 2012 Form 1098-T.
- Publish guidance reinstating forbearance on these penalties until a long-term solution has been identified.
- Revise the 1098-T filing process to allow filing institutions to affirmatively certify up front that they have “acted in a responsible manner” and met the waiver standards for soliciting TINs from students.
- Revise the §6050S regulations to allow institutions to refrain from filing the 1098-T for students who fail to provide a TIN. (For more details on collecting TINs, see sidebar, “Keeping Track of Student TINs.”)
Take Action Now
Until or unless the IRS makes an announcement waiving 2012 penalties, colleges and universities that have received penalty notices should either request an extension of the 45-day period provided for response or proceed with filing a request for a waiver.
In many cases, institutions will find that last year’s waiver request can simply be updated and resubmitted. NACUBO Advisory Report 2013-1, prepared last year in response to the 2011 notices, provides background information and guidance on responding to the IRS.
NACUBO CONTACT Mary Bachinger, director, tax policy, 202.861.2581