Requirements/Administrative Burden of the Taxpayer
Relief Act of 1997
Institutions are being required
ultimately to provide 1099s to those who submit tax returns
on behalf of a student indicating what payments have been received
by the institution.
There has been an acknowledged
administrative burden placed on institutions of higher education
to report data to the IRS to assist them in their administration
of components of the Tax Payer Relief Act. Temporary relief
was provided to institutions for the 1998 and 1999 calendar
Increased costs that the institutions
are facing in order to comply with the administration of this
are often being passed back to the families in the form of increased
tuition. Many schools have chosen third party servicers to do
this work for them, which increases costs even further.
The student is the consumer of
educational services. Information is already being collected
regarding the student (i.e. social security number, address,
etc.) and not the parent who may be filing the tax return. In
addition, all critical information is currently sent to the
student, including bills, grades and financial aid information.
This places the educational institution in a potential position
of providing tax advice.
There is a burden on the institution
to collect taxpayer information, which may or may not be custodial
parent information in the case of divorced or separated families.
The current law only cares about who is claiming the student
on the tax return.
The Internal Revenue Service
currently does not track dependent social security information.