ED issues additional guidance on acceptable documentation for verification of tax information

April 20, 2012 · TG Policy and Regulatory Affairs · No Comments

On April 16, 2012, ED issued Dear Colleague Letter (DCL) GEN-12-07 which provides school guidance on acceptable documentation for verification of tax information.

With the peak of tax filing season underway, ED has become aware that some students and families may not be able to immediately use the IRS Data Retrieval Tool when completing the Free Application for Federal Student Aid (FAFSA), or obtain a tax return transcript from the IRS as part of the verification process, simply because of the vast volume of federal tax returns being processed during this time of the year.

This new guidance provides that a school may use a signed copy of the applicant's, parent's, or spouse's 2011 IRS tax return as acceptable verification documentation for the 2012-2013 award year through July 15, 2012. This guidance is limited to cases where the FAFSA applicant needs a timely alternative to meet the verification requirements, and has both:

  • Filed a tax return, and
  • Attempted unsuccessfully to either:
    • Utilize the IRS Data Retrieval Tool, or
    • Obtain a tax transcript from the IRS.

ED indicates that, at some point in the future, it will require some schools to obtain verification documentation that is in compliance with the current acceptable documentation requirements, for a sample of the school's students whose information was verified using a paper copy of a 2011 federal tax return. Schools are encouraged to monitor ED's Information for Financial Professionals webpage for prospective information about the sampling process.

Overall, this guidance provides some added flexibility for schools as they verify tax information, and it may help minimize the burden for applicants seeking to meet the documentation requirements during this peak tax season. Schools that utilize this option during the specified time period should take care to update their policies and procedures as appropriate.

After July 15, 2012, schools must comply with the acceptable documentation requirements outlined in the Federal Register notice, and Dear Colleague Letter GEN-11-13, both published on July 13, 2011.

Finally, the guidance in DCL GEN-12-07 does not negate the fact that in excess of two million applicants and families have already used the IRS Data Retrieval Tool while completing the FAFSA. ED reemphasizes in the DCL that it also expects schools to continue to communicate the importance of using this tool when completing a FAFSA, or subsequently making corrections to it.

For more information
For questions related to the federal student aid programs, policies, and regulations, schools can contact the Federal Student Aid Research and Customer Care Center (RCCC) by phone at (800) 433-7327, during the hours of 9 a.m. - 5 p.m. ET, Monday through Friday, or by email at fsa.customer.support@ed.gov.

Tags: Financial Aid