American Opportunity Credit

[Bonnie]

Is there a way to find out if the American Opportunity Credit has been used for all 4 years if the taxpayer can't remember and does not have access to prior year returns. He says he knows he has taken it at least 3 years but not sure if he used it for 4 years. Does the IRS audit this and ask for it to me paid back if it is mistakenly claimed for a 5th year

[BOB W]

Generally a 4 year college happens over 5 tax years. If child was a senior in 2020, 4 tax years have already past.

[TaxGuyBill]

does not have access to prior year returns.

Can he GET access to prior year returns?

If not, he can probably file Form 4506-T to get a Tax Transcript that should show it.

[Gail Scarfino]

I would not assume that if he is a senior that he has taken the credit for 4 years. I've filed returns where I didn't use it the first year because cost were so low, or skipped a year because parents income was to high or it didn't benefit the taxpayer for one reason or another. If he doesn't have access to prior returns, he should try to get transcripts. If it's his parents returns that are needed, hopefully he can get them to request a transcript. I don't know of any other way.

[ATSMAN]

Yes IRS will audit it and demand repayment plus interest and penalties. I already went through one few years back and got them to waive the penalties.

[Dude]

You did not mention if your client was claimed as a dep or their age but remember a full time student under age 24 with at least one parent still alive whose earned income is less than half of their support cant claim the refundable portion of the credit.

https://www.irs.gov/pub/irs-pdf/p970.pdf

[BOB W]

Usually, Generally, in the senior year, final 5 months, the student finds a job upon graduating, and files as a single not a dependent of another. So the parent never gets the four years anyway if they don't take the first year's 4 months. Tuition for 4 months or five months should be similar, so why end up losing both, GENERALLY.

[TAX4US]

I have one where we know for sure TP only used 3 years of AOC then took his final APC in year 4. IRS said tp already used 4 prior (which was impossible) to the last year and denied the 4th one. Sent IRS a response asking proof. tp received notice saying they will respond by 3-31-2021. So yes IRS does track these things.