IRS Will Not Grant Any Additional Time for Colleges to Report Tuition Paid on Form 1098-T

Previously, we reported that the IRS had issued a second one-year extension of time for colleges and universities to comply with the requirement to report tuition actually paid, rather than the amount billed, on Form 1098-T.  (See Additional Penalty Relief Granted to Educational Institutions Who Continue to Reports Amoufnts Billed Rather Than Paid on Form 1098-T)  But it appears that the colleges request for yet another extension will fall on deaf ears.

Tax Analysts reported in an article dated Aug. 15, 2017 that the National Association of College and University Officers (NACUBO) had been told by IRS officials that the agency will not grant any additional time to the educational institutions to comply with the reporting requirement added by 2015’s Protecting Americans from Tax Hikes Act (PATH).[1]  

The most recent extension allowed the educational institutions to continue to report either the amounts paid or billed on 2017 Forms 1098-T.  If the IRS holds firm and does not grant another extension of time, these organizations will be required to report amounts actually paid on 2018 Forms 1098-T or face penalties for noncompliance with the law.

While this is going to be seen as bad news by those who are in charge of reporting for these entities, for those involved in preparing returns this will be a welcome change, especially in light of the additional due diligence requirements imposed on those preparing tax returns claiming the American Opportunity Tax Credit.  These requirements were discussed on this site last year when the temporary regulations were released (Expanded Due Diligence Temporary Regulations Issued by IRS, Applicable for 2016 Tax Returns).

[1] Fred Stokeld, “IRS Won’t Extend Transition Relief on Tuition Reporting Change”, Tax Notes Today, 2017 TNT 156-5, August 15, 2017