Can I just say.......

[joanmcq]

Exactly. Then they'll say they got a scholarship, or GI bill or took out a loan. differing treatments.

[RitaB]

Well, this year

I had a client with $8500 or so on the form for amounts billed. No other numbers on the form. At all. I was thinking, "they can't afford that", so I asked if they got any scholarships or financial aid, and wife said, "Oh yeah, it was all paid by the G I Bill." Seems husband was former military. Who knew? She didn't even know that she was supposed to tell me that. All she knew was, "Here's an official tax document, I'll take it to the tax lady."

I never start out by asking to see the print out from school. I just ask client, "Did you pay all that, or did you have assistance or scholarships?" It's not usually a lot of trouble. If they can't remember what happened, I have them dig.

[David1980]

I'll preparer a return based on a 1098-T as long as the amounts sound right to the taxpayer. If the numbers don't make sense or don't match up with what the taxpayer remembers paying I toss it (not really, but I ignore the 1098-T and preparer the return based on real numbers, preferably an accounting printout from the school but I'll take numbers presented by the taxpayer as well.)

[equinecpa]

Snaggle - I read this thread and was saying "say what" to myself. I too use the 1098-T. I don't have time to second guess every form that comes into my office. They may be in fact wrong but unless I know otherwise I'll use them.

[Snaggletooth]

Blind Faith

I think the 1098T is the MOST USELESS form the IRS has ever dreamed up.

Contrary to my usual big mouth, I've stayed out of this thread until now.

I'm not going to try and convince any of you that this is the right thing to do. However, most of the time I simply take the 1098T information as is, and use it.

Yes, I know the pitfalls, and all the reasons it could be wrong. It doesn't necessarily HAVE to be wrong. Billings could (and often do) equal payments. Usually, the categorization of expenses is correct, except many of them do not include bookstores, which are often privately contracted. If I have knowledge, or can suspect, that something is inaccurate, I will pursue correction.

I don't know why it is the preparer's responsibility to mop up behind the carnage left by shoddy and possibly inaccurate 1098-T preparation on the part of the University. Why can't these schools bear the responsibility of their haphazard reporting and let the IRS come after THEM?

The obvious answer is they won't. They are tax-exempt to begin with, and chock full of powerful influence if need be. There is hardly a University on the planet that doesn't have an Accounting/Tax professor capable of interpreting the reporting responsibilities of these 1098-Ts. Yet several years after their introduction, they are being reported no better than when they started.

Oleander, you are correct in everything you state, as usual. But in most cases, I use the information carte blanc and don't torment the client to track down timing differences with the universities, chase it down for a day or two, and delay the return. Time for the old "you bangee, you fixee" doctrine with these schools. But I'm not pretending to suggest that other preparers approach this the same way I do.

[Lion]

I Know

They think we were wrong all those earlier years, when a tax law changes. Then they start bringing in newspaper clippings again!

[Jesse]

Our state universities have the ledger on the back too. Very useful. But what about next year when books qualify as expenses?

Yes, that's when they'll look at you with that confused "Huh" look and say but you told me we couldn't write off any books!?!

[joanmcq]

Our state universities have the ledger on the back too. Very useful. But what about next year when books qualify as expenses?

[Lion]

Student

Student goes on-line to get his statement of receipts and disbursements. Can do it from your office if he's there. Maybe he'll give you his password even if he won't give it to his parents. (I wanted to withhold money from our daughter/my stepdaughter until she handed over password, but divorce decree forces my husband to pay her college expenses, so...)

[outwest]

One school that does is right..

one of our state universities automatically prints the student ledger on the back of the 1098T. Sadly, it's not a process followed by the other state schools or local junior college.

[Jiggers]

1098T Useless

99.9% of my clients kept no records of the education expenses. They rely only on the 1098T.

[erchess]

It would serve the government right

if we as tax professionals agreed that when there is an amount in box two of a 1099T we are going to assume that the taxpayer paid that exact amount of tuition and had no grants or other reductions whatsoever. As we've discussed here loans count as tuition paid. The IRS would spend more money on the collections process than they would collect in additional taxes if they tried to do anything about this and they would eventually end up requiring that form 1099T have all the info necessary to calculate the tuition credit and that it be keyed in on e-filed returns and accompany paper returns just like a W-2. I'm not seriously suggesting that anyone do this and I'm certainly not going to do it but it would serve the government right if enough of us to create a problem did.

[joanmcq]

The reason there were no numbers the first year is the schools complained they were not able to report all that yet.

What you have to remember when you ask what they paid is that loans count as payment!!! When I took out loans, the tuition got paid first and I got the rest. So to the unsuspecting, they didn't actually write out a check or anything. But they did pay through the loan. At least the form has scholarships you can net against the amount billed.

[Jesse]

i hate that form too. wouldn't it be easier for us and the schools, if they just checked off the little box that says half time student? then print up the kid's statement. and let us do the math.

Or if they just check the box full/half time and not put any numbers in and let the clients bring in statements of how much was paid and when it was paid. If I recall correctly, when these forms first came out that is what happened and although you needed to explain why they got this form with no amounts, it made them do the legwork for what was actually paid - rather than have them look at you like you should know because there is an amount in box 2.

I think another problem can be the fact that the schools will not give any information out to parents. So you are telling the parents what you need and they need to tell the kid and by the time the kid asks the school all is lost in translation so you're back to square one.

[taxmom34]

i hate that form too. wouldn't it be easier for us and the schools, if they just checked off the little box that says half time student? then print up the kid's statement. and let us do the math.