IRS Examining Education Credits

Education Credits Catch IRS Attention

 The IRS is carefully monitoring taxpayers who claim education credits on their personal income tax returns due to increased filing of fraudulent returns. Accordingly, IRS audits of taxpayers claiming education credits are increasing. Can you substantiate your claimed education credits?

As we have been sharing with our clients, the Form 1098-T used by educational institutions is practically worthless. In fact, these forms (through the 2017 tax year) may have contributed to IRS audits. Most educational institutions left Box 1 blank and completed Box 2. Box 1 reflects the payments received by the educational institution from the taxpayer; whereas Box 2 reflects the amounts billed by the educational institution. The IRS could care less about the amounts billed. It bases the credit computation on the amounts paid. If Box 1 is left blank, then the IRS does not know how much was paid by the taxpayer for qualified tuition payments.

In addition to the problems associated with the Form 1098-T, the IRS [Read more…] about IRS Examining Education Credits