Education Credits with Form 1098T but School not showing eligible in DAPIP

[MariaR08]

I may be having a "foggy brain" moment but I can't seem to find any info on this.

Situation: Individual taxpayer went to a vocational/trade school for cosmetology. Received a properly filled out 1098-T showing tuition paid of $7k. Taxpayer would be eligible to claim based on income and whatnot.

This particular school is not listed on the DAPIP (Database of Accredited Postsecondary Institutions and Programs).
Per IRS: https://www.irs.gov/credits-deductio...ucational-inst

So of course, to the taxpayer, they totally believe they are eligible because they were given the 1098-T. But if the school is not on the DAPIP, does that automatically rule it out from any education credit?

Thanks for the help in advance!

[Rapid Robert]

That DAPIP list is not authoritative. "The U.S. Department of Education cannot, therefore, guarantee that the information contained in the database is accurate, current, or complete." Accreditation is performed by local, private organizations, not the U.S. government.

So, to answer your question, being omitted from the list does not automatically rule it out for education benefit. With a valid 1098-T, I would not have a problem using it properly on the tax return. The actual requirement is being able to participate in U.S. Dept of Ed. student aid program, not being accredited. The school is considered a reliable source for whether or not it is eligible.

As the IRS says in Pub 970,

"An eligible educational
institution is any college, university, vocational school, or
other postsecondary educational institution eligible to participate
in a student aid program administered by the U.S.
Department of Education. It includes virtually all accredited
public, nonprofit, and proprietary (privately owned
profit-making) postsecondary institutions.
The educational institution should be able to tell
you if it is an eligible educational institution."

[MariaR08]

After a little digging, here's what I found on this particular school's FAQ webpage:

- Do you offer federal student financial aid?
No we do not participate in Title IV funding.

So the fact they do not participate rules them out, right? Could it be they are "eligible" but "choose" not to participate? Maybe I'm reading too much into this LOL

Here's where I'm at... they issued a proper Form 1098-T and everything looks right, except their website saying they do not "participate" makes me rule it out and say we cannot claim education credits.

[Rapid Robert]

"Could it be they are "eligible" but "choose" not to participate? Maybe I'm reading too much into this LOL".

Yes, and yes.

I see you asked this question in another tax forum with a similar response as mine. Unless the 1098-T looks obviously forged, I'd say you as a preparer are perfectly safe in using it to prepare the return. And by not using it, you would be doing your client a disservice at best. And since the Lifetime Learning Credit is nonrefundable, you don't even have to include it on Form 8867 paid preparer due diligence.

[MariaR08]

"Could it be they are "eligible" but "choose" not to participate? Maybe I'm reading too much into this LOL".

Yes, and yes.

I see you asked this question in another tax forum with a similar response as mine. Unless the 1098-T looks obviously forged, I'd say you as a preparer are perfectly safe in using it to prepare the return. And by not using it, you would be doing your client a disservice at best. And since the Lifetime Learning Credit is nonrefundable, you don't even have to include it on Form 8867 paid preparer due diligence.

Yes, my client wanted to get it done by today because of vacation out of the country in a couple days so I was trying to get it done as quickly as possible.

Thank you for responding, I truly appreciate it! We ended up going with yes, we are filing for the education credits and did make the taxpayer aware of all the info I had.