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Mark LaPrade, CPA

Limited Penalty Relief for Filers of Form 1098-T, Tuition Statement

2016-05-04

Under current law, (Section 212 of the Protecting Americans from Tax Hikes Act of 2015), all eligible educational institutions are required to report amounts paid for qualified tuition and related expenses on Form 1098-T, Tuition Statement.

The IRS has released an advance version of Announcement 2016-17. It indicates the IRS will not impose penalties on an eligible educational institution with respect to Forms 1098-T, Tuition Statement for the 2016 calendar year, solely because the eligible educational institution reported the aggregate amount billed for qualified tuition and related expenses for the 2016 calendar year.

What does this mean? Eligible educational institutions will continue to have the option of reporting the following without being subject to penalties:

  • The amount of payments of qualified tuition and related expenses received or
  • The amount of qualified tuition and related expenses billed for the 2016 calendar year

The relief provided under Announcement 2016-17 is limited to 2016 Forms 1098-T, Tuition Statement required to be filed by eligible educational institutions by February 28, 2017 (or March 31, 2017, if filed electronically), and furnished to recipients by January 31, 2017.

It also does not provide penalty relief for any other failure that a filer would be subject to penalties under section 6721 or 6722, or any other penalty under any provision of the Internal Revenue Code.