Industry Insights

Limited Penalty Relief for Form 1098-T Filers

May 2016
Author:  Joyce Dulworth

Joyce Dulworth

Partner

Tax

Health Care
Not-for-Profit & Government
Private Client Services

200 E. Main Street, Suite 700
Fort Wayne, IN 46802-1900

Fort Wayne
260.460.4000

In Announcement 2016-17, the IRS stated penalties won’t be imposed on educational institutions for reporting the amount billed rather than amount paid for qualified tuition and related expenses on Form 1098-T, Tuition Statement. This relief only is available for the 2016 forms and would not provide any relief for other penalties related to the forms.

Previously, educational institutions were allowed to report based on either amounts billed—the more popular method—or amounts paid. However, the amounts billed option was eliminated in the Protecting Americans from Tax Hikes Act passed in December 2015, and institutions converting to the amounts paid method encountered numerous logistical issues. To properly report information under the new rule, institutions needed to reprogram software and develop new systems.

The National Association of College and University Business Officers recently wrote a letter to the IRS describing the logistical issues in detail and requesting relief.

Please contact your BKD advisor with any questions.

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