On Friday, August 28, 2015, the IRS announced that it will waive penalties assessed against any college, university, or other educational institution for Forms 1098-T that were filed with an incorrect or missing taxpayer identification number (TIN). The IRS will grant this relief for tax years 2012, 2013 and 2014. Any educational institution that was previously assessed a penalty should receive a letter from the IRS by October 1. If an institution that was previously assessed a penalty does not receive a letter by October 1, the IRS advises that the institution should respond to the original IRS notice.
The relief for tax years 2012, 2013 and 2014 was granted after the passage of the Trade Preferences Extension Act of 2015 (Act) which included a special rule for educational institutions. Specifically, the Act provides that no penalty will be imposed on an educational institution for failure to file correct information returns or furnish correct payee statements solely due to failure to provide a TIN on Form 1098-T if the educational institution contemporaneously certifies, under penalty of perjury, that it has complied with the regulations governing the solicitation of a TIN.
In its announcement, the IRS emphasized that the special rule for educational institutions included in the Act does not relieve an educational institution from the requirement to properly solicit TINs. The special rule included in the Act applies to returns filed after December 31, 2015.
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