VERIFICATION IRS DRT AND TAX TRANSCRIPTS. Verification Resources. Verification Resources. NDASFAA 2012 Verification 04/12/2012

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1 VERIFICATION IRS DRT AND TAX TRANSCRIPTS NDASFAA Spring 2012 Ft. Yates, North Dakota April 12, 2012 Verification Resources 6/18/10 NPRM (Pages ) nterityissuesnprm.html 10/29/10 Final Rule (Pages and ) ml Federal Register Notice of Information To Be Verified for the Award Year ormation.html GEN and GEN Verification Resources Q&A on Program Integrity web site: eg/hearulemaking/2009/verification.ht ml Sample Verification Worksheets ts/020312sampleverificationworksheets 1213.html

2 Verification Resources FAFSA-IRS Tax Return Transcript Matrix 412Verification1213IRSTaxReturnMatrix.html Application and Verification Guide bookavg.html 44 10/29/10 VERIFICATION REGULATIONS 5 Effective Date Verification regulations effective July 1, 2012 for award year Remember 12/13 FAFSA processing has already begun! 6 2

3 Verification - Definitions o Subsidized student financial assistance programs o Eligibility uses EFC o Verification applies o Pell, FSEOG, FWS, Perkins, Direct Subsidized Loan o Unsubsidized student financial assistance programs o Eligibility does not use EFC o Verification does not apply o Direct Unsubsidized Loan & Direct PLUS Loan o TEACH Grant 77 Verification - Definitions o Use FAFSA information instead of application o Specified year o The calendar year preceding the first calendar year of an award year, i.e. the base year, or the year preceding the base year o Applicant responsibility o Applicant must provide specified documents or information if requested by the Secretary or institution 8 Verification Selection o CPS applies risk model to FAFSA data o Goal is to target verification based upon the most error prone data items specific to an applicant o Non-selected applicants are again subject to risk model when submitting corrections 9 3

4 Verification Selection o Institutions must verify all applicants selected by CPS o Removes institution s option to verify only 30% of applicant pool 10 Changes To FAFSA Information o For subsidized programs, submit all verification changes to CPS if change is: o To any non-dollar item or o A single dollar item of $25 or more o $400 tolerance is eliminated o If required to submit one change, must submit all changes 11 Verification Items o Annual Federal Register notice lists verification items and acceptable documentation o notice published 7/13/11 o Goal to specify required verification items for individual applicant on SAR/ISIR o Institution may select additional applicants or verify additional items for an applicant 12 4

5 Verification Items o All applicants o Household size o Number in college o SNAP benefits (formerly food stamps) if receipt reported on FAFSA o Child support paid if amount reported on FAFSA Verification Items Tax filers Adjusted gross income U.S. income tax paid Education credits Specific untaxed income items Untaxed IRA distributions Untaxed Pensions IRA deductions Tax Exempt Interest Verification Items o Non-tax filers Income earned from work 15 5

6 Acceptable Documentation For items on 2011 income tax return o Amounts retrieved & unchanged from IRS DRT via FOTW (either on initial or correction application) with IRS Request Flag value of 02 OR o A tax return transcript obtained from the IRS see DCL GEN For all other verification items o Verification worksheet either ED s sample or developed by institution Acceptable Documentation IRS Data Retrieval Process IRS Tax Return Transcript By paper (Form 4506T-EZ or IRS Form 4506-T) 10 business days for processing Online or by phone 5 to10 business days for processing IRS Tax Account Transcript By paper (Form 4506-T) processed within 30 calendar days Online or by phone 5 to 10 business days for processing Record of Account By paper only (Form 4506-T) processed within 30 calendar days 1717 Documentation: Household Size o Household size o Signed statement including o Name of each household member, o Age of each household member, AND o The relationship to the applicant

7 Exceptions to Verifying Household Size o For dependent student when parental marital status is- Single, separated, divorced, or widowed and family size on the FAFSA = 2 Married and family size on the FAFSA = 3 o For independent student who is- Single, separated, divorced, or widowed and family size on the FAFSA = 1 Married and the family size on the FAFSA = Documentation: Number in College o Number in college o Signed statement o Name and age of each household member who will attend eligible postsecondary educational institution at least half-time in o Name of the eligible institution(s) that each household member is or will be attending during o Not required if applicant is only member in college Documentation: SNAP o Supplemental Nutrition Assistance Program (SNAP) benefits (formerly food stamps) if receipt is reported on the FAFSA o Certification on verification worksheet o Institution may request documentation from the agency that issues the SNAP benefit

8 Documentation: Child Support o Child support paid if reported on the FAFSA o Certification on verification worksheet (or separate statement) indicating o Amount of child support paid o Name of the person to whom it was paid, and o Name of the children for whom it was paid IRS Extension Filers o Verification is complete if you have -- o Documentation of IRS extension and o 2011 W-2 Forms or statement from selfemployed individual o MAY require an individual granted a tax filing extension to provide a copy of their completed and signed tax return when filed o MUST verify AGI and taxes paid, if you receive a copy of the return o May return all funds disbursed, if you do not 23 receive copy 23 Verification & PJ o Requires verification of all selected applicants before exercising professional judgment o Does not mean verification is required before exercising PJ for non-selected applicants

9 Updating FAFSA-reported info is generally a snapshot Unless due to student s marital status change, must update for Dependency status changes (all applicants, anytime) AND Household size and number in college (selected applicants, at the time of verification) 25 Marital Status Updating Marital status updates permitted only by FAA to address inequity or better reflect ability to pay When dependency status changes AND/OR When selected applicant needs to update household size and number in college If FAA changes marital status, other updates may be needed 2626 Interim Disbursements o May make interim disbursements without receipt of corrected ISIR if completed verification makes no change to aid eligibility o All required corrections must be submitted to CPS AND school must receive revised ISIR transaction OR school will be liable for payment student receives 27 9

10 Verification After Enrollment Ends o Student no longer limited to lesser Pell Grant award if verification completed after enrollment ends o Student will receive Pell Grant payment based upon correct EFC 28 My Training Officer Supervisor requests feedback from FAAs Mark Gerhard Supervisor of Training Officers U.S. Dept of Ed/Federal Student Aid mark.gerhard@ed.gov 29 My contact information Rick Renshaw Training Officer U.S. Dept of Ed Federal Student Aid Denver Regional Office rick.renshaw@ed.gov 30 10

11 Your Denver Regional Training Team Margaret Day, Training Officer Rick Renshaw, Training Officer Deb Tarpley, Training Officer