Final Regulations (2002)

Information Reporting for Qualified Tuition and Related Expenses; Magnetic Media Filing Requirements for Information Returns

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[Federal Register: December 19, 2002 (Volume 67, Number 244)]
[Rules and Regulations]
[Page 77678-77687]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19de02-9]

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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1, 301, and 602

[TD 9029]
RIN 1545-BA43

Information Reporting for Qualified Tuition and Related Expenses;
Magnetic Media Filing Requirements for Information Returns

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations.

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SUMMARY: This document contains final regulations relating to the
information reporting requirements for qualified tuition and related
expenses under section 6050S of the Internal Revenue Code, including
rules prescribing when the required information returns must be filed
on magnetic media. The final regulations reflect changes made to the
law by the Taxpayer Relief Act of 1997 and the amendments made by the
Internal Revenue Service Restructuring and Reform Act of 1998 and
Public Law 107-131. These regulations provide guidance to eligible
educational institutions that enroll any individual for any academic
period. These regulations also provide guidance to insurers that make
reimbursements or refunds of qualified tuition and related expenses.

DATES: Effective Date: These regulations are effective December 19,
2002.

    Applicability Dates: For dates of applicability, see Sec.  1.6050S-
1(f) and Sec.  301.6011-2(g)(3).

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Tonya
Christianson, (202) 622-4910; and concerning the magnetic media filing
specifications, waivers for filing on magnetic media, and extensions of
time, contact the IRS, Martinsburg Computing Center, (304) 263-8700
(not toll-free numbers).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    The collection of information contained in these final regulations
has been reviewed and approved by the Office of Management and Budget
in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3507(d)) under control number 1545-1678. Responses to this collection
of information are mandatory.

    An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a valid
control

[[Page 77679]]

number assigned by the Office of Management and Budget.

    The estimated reporting burden for the reporting in these
regulations is reflected on the burden for Form 1098-T.

    Estimated total annual reporting burden for 2001 for Form 1098-T:
3,056,411 hours.

    Estimated number of responses for 2001 for Form 1098-T as of
November 22, 2002: 20,376,075.

    Estimated average annual burden hours per response for 2001 for
Form 1098-T: 9 minutes.

    Comments concerning the accuracy of this burden and suggestions for
reducing this burden should be sent to the Internal Revenue Service,
Attn: IRS Reports Clearance Officer, W:CAR:MP:FP:S, Washington, DC
20224, and to the Office of Management and Budget, Attn: Desk Officer
for the Department of the Treasury, Office of Information and
Regulatory Affairs, Washington, DC 20503.

    Books or records relating to a collection of information must be
retained as long as their contents may become material in the
administration of any internal revenue law. Generally, tax returns and
tax return information are confidential, as required by 26 U.S.C. 6103.

Background

    This document contains amendments to the Income Tax Regulations (26
CFR part 1) relating to the information reporting requirements for
qualified tuition and related expenses under section 6050S of the
Internal Revenue Code (Code) and amendments to the Procedure and
Administration Regulations (26 CFR part 301) relating to magnetic media
reporting. The Taxpayer Relief Act of 1997 (Public Law 105-34 (111
Stat. 788) (TRA '97)) added section 6050S of the Code. Section 6050S
was amended by the Internal Revenue Service Restructuring and Reform
Act of 1998 (Public Law 105-206 (112 Stat. 685) (RRA '98)), and Public
Law 107-131 (115 Stat. 2410). In general, section 6050S requires any
eligible educational institution (institution) to file information
returns and to furnish written information statements to assist
taxpayers and the Internal Revenue Service (IRS) in determining the
amount of qualified tuition and related expenses (qualified expenses)
for which an education tax credit is allowable under section 25A (as
well as other tax benefits for higher education expenses). See H.R.
Conf. Rept. No. 599, 105th Cong., 2d Sess., pp. 319-320 (1998).

    As provided by Public Law 107-131, for calendar years beginning
after December 31, 2002, institutions may elect to report either the
aggregate amount of payments received, or the aggregate amount billed,
for qualified expenses during the calendar year with respect to
individuals enrolled for any academic period. Institutions must report
separately adjustments (i.e., refunds of payments or reductions in
charges) made during the calendar year to payments received, or amounts
billed, for qualified expenses that were reported in a prior calendar
year. In addition, institutions must report the aggregate amount of
scholarships or grants received for an individual's costs of attendance
that the institution administered and processed during the calendar
year. Institutions must report separately adjustments (i.e., refunds or
reductions) made during the calendar year to scholarships that were
reported in a prior calendar year.

    In addition, section 6050S requires any person engaged in a trade
or business of making payments to any individual under an insurance
agreement as reimbursements or refunds of qualified expenses (an
insurer) to file information returns and to furnish written information
statements.

    A notice of proposed rulemaking under section 6050S (REG-105316-98)
was published in the Federal Register (65 FR 37728) on June 16, 2000
(the 2000 proposed regulations). The 2000 proposed regulations relating
to the information reporting requirements for institutions and insurers
were withdrawn and a new notice of proposed rulemaking (REG-161424-01)
was published in the Federal Register (67 FR 20923) on April 29, 2002
(the 2002 proposed regulations). No request for a public hearing was
received on the 2002 proposed regulations. The IRS received written and
electronic comments responding to the 2002 notice of proposed
rulemaking. After consideration of all the comments, the 2002 proposed
regulations are adopted as amended by this Treasury decision. The
revisions are discussed below.

Explanation of Provisions and Summary of Comments

1. Information Reporting Relating to Qualified Tuition and Related
Expenses

A. Required Reporting and Exceptions to Reporting

(i) Reporting Based on Academic Year vs. Calendar Year

    One commentator to the 2002 proposed regulations requested that
institutions be allowed to report financial data based on an academic
year, and not based on a calendar year. Section 6050S requires
institutions to report on a calendar year in order to assist taxpayers
in calculating the education tax credit that is allowable for qualified
expenses paid during a calendar year. Therefore, the final regulations
do not adopt this recommendation.

(ii) Exception for Noncredit Courses

    The 2002 proposed regulations provide an exception to reporting for
any student who is enrolled during the calendar year only in courses
for which no academic credit is offered. Several commentators to the
2002 proposed regulations requested that if a student is enrolled both
in courses for which academic credit is offered (e.g., courses in a
postsecondary degree program) and courses for which no academic credit
is offered (e.g., courses in a continuing education program),
institutions should be required to report only the courses for which
academic credit is offered. The commentators suggested that the
exception to reporting should be based on the category of courses, not
the category of students. The commentators explained that institutions
maintain separate databases for credit courses and noncredit courses
and that it would create a substantial hardship if institutions were
required to report for both credit courses and noncredit courses. In
response to these comments, and because under section 25A and the
regulations thereunder a student enrolled in a postsecondary degree
program is not eligible to claim a Hope Scholarship Credit (and may not
be eligible to claim a Lifetime Learning Credit) for noncredit courses,
the final regulations adopt this recommendation. Accordingly, the final
regulations provide that institutions are not required to report with
respect to courses for which no academic credit is offered by the
institution, even if the student is enrolled in a degree program.

(iii) No Exception for Small Amounts of Qualified Tuition and Related
Expenses

    One commentator to the 2002 proposed regulations requested that the
regulations provide an exception to reporting for qualified expenses of
$100 or less. The limited exceptions to required reporting are based on
the fact that certain categories of students may not be eligible to
claim the education tax credit and that certain payments may not be
taken into account in calculating the amounts paid for qualified
expenses for which an education tax credit is allowable. An exception
to reporting for small amounts of qualified expenses has no
relationship to whether an education tax

[[Page 77680]]

credit is allowable for amounts paid for qualified expenses. Therefore,
the final regulations do not adopt this recommendation.

(iv) Exception for Students Whose Qualified Expenses Are Covered by
Formal Billing Arrangement

    The 2002 proposed regulations provide an exception to reporting for
any student whose qualified expenses are paid by the student's employer
through a formal billing arrangement under which the employer's
employees attend the institution, the institution bills only the
employer, and the institution does not maintain a separate account for
any employee/student. Several commentators to the 2002 proposed
regulations requested that this exception be expanded to include formal
billing arrangements between institutions and other third party payors,
such as the Veterans' Administration, U.S. Armed Forces, and other
governmental and private organizations.

    Under section 25A and the regulations thereunder, a taxpayer cannot
claim the education tax credit for educational expenses paid with
amounts that are excludable from gross income. Educational expenses
paid through a formal billing arrangement between an institution and a
governmental entity, such as the Veterans' Administration, often are
excludable from the gross income of the individual student. Therefore,
the final regulations expand the exception to cover formal billing
arrangements between an institution and a governmental entity under
which the institution bills only the governmental entity and does not
maintain a separate account with respect to any individual student. In
addition, the final regulations authorize the Commissioner to designate
additional types of formal billing arrangements for which no reporting
will be required. It is anticipated that any additional formal billing
arrangements designated by the Commissioner will be limited to
situations in which the individual students generally would not be
eligible to claim an education tax credit with respect to the payments
made by the institutional third party payor.

(v) Family Educational Rights and Privacy Act and Optional Reporting

    The U.S. Department of Education has previously determined that
reporting under section 6050S does not violate the Family Educational
Rights and Privacy Act (FERPA) (20 U.S.C. 1232g). Several commentators
to the 2002 proposed regulations requested clarification as to whether
an institution that chooses to report on all students under section
6050S, even if the regulations provide an exception to required
reporting, would violate FERPA. After the 2002 proposed regulations
were issued, the Treasury Department asked the Department of Education
to consider whether its earlier determination would extend to an
institution that chooses to report on students otherwise covered by an
exception to required reporting. The Department of Education has
recently determined that an institution will not violate FERPA if it
chooses to report information on all students in accordance with
section 6050S, even if the regulations provide an exception to required
reporting.

B. Required Information for Institutions

(i) Reporting Amounts Billed in One Year That Relate to an Academic
Period That Begins During the First Three Months of the Next Year

    Several commentators to the 2002 proposed regulations requested
that the final regulations eliminate the requirement that institutions
indicate that amounts reported as billed in one calendar year relate to
qualified expenses for an academic period that begins during the first
three months of the next calendar year. The commentators explained that
most institutions bill late in one calendar year for the qualified
expenses that relate to an academic period that begins in the first
three months of the next calendar year. The commentators questioned the
usefulness of this information.

    Under section 25A and the regulations thereunder, the education tax
credit is allowable only for amounts actually paid during the calendar
year for an academic period that begins during the same calendar year
or during the first three months of the next calendar year. Therefore,
there may be situations where an institution reports amounts billed for
qualified expenses in one calendar year that relate to an academic
period that begins during the first three months of the next calendar
year, and the taxpayer pays the qualified expenses in the next calendar
year. In this situation, the taxpayer and the IRS should be advised
that the amounts reported as billed during a calendar year may not be
amounts for which the taxpayer may claim the education tax credit for
that year. Therefore, the final regulations do not adopt this
recommendation.

(ii) Reporting Requirements for Increases to Charges for Qualified
Expenses and Grants Reported for a Prior Calendar Year

    One commentator requested clarification as to whether the 2002
proposed regulations purposely did not require separate reporting for
increases to charges for qualified expenses and grants reported by the
institution for a prior calendar year. The amendments to section 6050S
by Public Law 107-131 require institutions to report the aggregate
amount of charges for qualified expenses and the aggregate amount of
grants administered and processed during the calendar year. These
aggregate amounts would include any increases in charges for qualified
expenses that relate to a prior year and any increases in grants that
relate to a prior year. Therefore, no separate reporting is required
for increases to charges for qualified expenses and grants that relate
to a prior year.

(iii) Information Contact

    The 2002 proposed regulations require institutions and insurers to
include on the information statement furnished to the student the name,
address, and phone number of the office or department within the
institution or insurer that is the information contact. Several
commentators requested that the regulations be revised to allow third
party service providers that file information returns on behalf of the
institutions or the insurers, as well as a third party call centers, to
be designated as the information contact. Consistent with section
6050S(d)(1), the final regulations require institutions and insurers to
include the name, address, and phone number of the information contact
of the person required to file the information return. This provision
does not preclude any institution or insurer that is required to file
an information return from including, in addition to its own name,
address, and phone number, the name, address, and phone number of a
third party service provider.
C. Information Reporting Penalties

(i) Filing Information Returns With Missing TINs

    Several commentators to the 2002 proposed regulations requested
that institutions not be required to file information returns and to
furnish information statements for students who refuse to provide their
TINs. Information returns and information statements with missing TINs
are useful to both the IRS and the taxpayer in verifying the amount of
any allowable education tax credit (as well as other tax

[[Page 77681]]

benefits for higher education expenses). Therefore, the final
regulations do not adopt this recommendation.

2. Requirement To File Information Returns on Magnetic Media

    The final regulations amend the regulations under section 6011(e)
to require institutions and insurers who are required to file 250 or
more Forms 1098-T, "Tuition Statement," to file on magnetic media.

Special Analyses

    It has been determined that this Treasury decision is not a
significant regulatory action as defined in Executive Order 12866.
Therefore, a regulatory assessment is not required. It has also been
determined that section 553(b) of the Administrative Procedure Act (5
U.S.C. chapter 5) does not apply to these regulations. A final
regulatory flexibility analysis has been prepared for the collection of
information in this Treasury decision. This analysis is set forth in
this preamble under the heading "Final Regulatory Flexibility
Analysis." Pursuant to section 7805(f) of the Code, the proposed
regulations preceding these regulations were submitted to the Chief
Counsel for Advocacy of the Small Business Administration for comment
on its impact on small business.

Final Regulatory Flexibility Analysis

    The collection of information contained in Sec.  1.6050S-1 is
needed to assist the IRS and taxpayers in determining the amount of any
education tax credit allowable under section 25A (as well as other tax
benefits for higher education expenses). The objectives of these final
regulations are to provide uniform, practicable, and administrable
rules under section 6050S. The types of small entities to which the
regulations may apply are small eligible educational institutions (such
as colleges and universities) and certain insurers who reimburse
educational expenses.

    There are no known Federal rules that duplicate, overlap, or
conflict with these regulations. The regulations are considered to have
the least economic impact on small entities of all alternatives
considered.

    Moreover, the regulations requiring filing Forms 1098-T on magnetic
media impose no additional reporting or record keeping and only
prescribe the method of filing information returns that are already
required to be filed. Further, these regulations are consistent with
the statutory requirement that an institution or insurer is not
required to file Forms 1098-T on magnetic media unless required to file
at least 250 or more returns during the year. Finally, the economic
impact caused by requiring Forms 1098-T on magnetic media should be
minimal because most institutions' or insurers' operations are
computerized. Even if their operations are not computerized, the
incremental cost of magnetic media reporting should be minimal in most
cases because of the availability of computer service bureaus. In
addition, the existing regulations under section 6011(e) provide that
the IRS may waive the magnetic media filing requirements on a showing
of hardship. The waiver authority will be exercised so as not to unduly
burden institutions and insurers lacking both the necessary data
processing facilities and access at a reasonable cost to computer
service bureaus.

Drafting Information

    The principal author of the regulations is Tonya Christianson,
Office of Associate Chief Counsel (Procedure and Administration),
Administrative Provisions and Judicial Practice Division. However,
other personnel from the IRS and the Treasury Department participated
in the development of the regulations.

List of Subjects

26 CFR Part 1

    Income tax, Reporting and record keeping requirements.

26 CFR Part 301

    Employment tax, Estate tax, Excise tax, Gift tax, Income tax,
Penalties, Reporting and record keeping requirements.

26 CFR Part 602

    Reporting and recordkeeping.

Adoption of Amendments to the Regulations

    Accordingly, 26 CFR parts 1, 301, and 602 are amended as follows:

PART 1--INCOME TAX

    1. The authority citation for part 1 is amended by adding an entry
in numerical order to read in part as follows:

    Authority: 26 U.S.C. 7805 * * *

    Section 1.6050S-1 also issued under section 26 U.S.C. 6050S(g).* *
*

    2. Section 1.6050S-0 is amended by revising the introductory
language and adding new entries for Sec.  1.6050S-1 to read as follows:

Sec.  1.6050S-0  Table of contents

    This section lists captions contained in Sec. Sec.  1.6050S-1,
1.6050S-2T, 1.6050S-3, and 1.6050S-4T.

Sec.  1.6050S-1  Information reporting for qualified tuition and
related expenses.

(a) Information reporting requirement.
(1) In general.
(2) Exceptions.
(i) No reporting by institutions or insurers for nonresident alien
individuals.
(ii) No reporting by institutions for noncredit courses.
(A) In general.
(B) Academic credit defined.
(C) Example.
(iii) No reporting by institutions for individuals whose qualified
tuition and related expenses are waived or are paid with
scholarships.
(iv) No reporting by institutions for individuals whose qualified
tuition and related expenses are covered by a formal billing
arrangement.
(A) In general.
(B) Formal billing arrangement defined.
(b) Requirement to file return.
(1) In general.
(2) Information reporting requirements for institutions that elect
to report payments received for qualified tuition and related
expenses.
(i) In general.
(ii) Information included on return.
(iii) Reportable amount of payments received for qualified tuition
and related expenses during calendar year determined.
(iv) Separate reporting of reimbursements or refunds of payments of
qualified tuition and related expenses that were reported for a
prior calendar year.
(v) Payments received for qualified tuition and related expenses
determined.
(vi) Reimbursements or refunds of payments for qualified tuition and
related expenses determined.
(vii) Examples.
(3) Information reporting requirements for institutions that elect
to report amounts billed for qualified tuition and related expenses.
(i) In general.
(ii) Information included on return.
(iii) Reportable amounts billed for qualified tuition and related
expenses during calendar year determined.
(iv) Separate reporting of reductions made to amounts billed for
qualified tuition and related expenses that were reported for a
prior calendar year.
(v) Examples.
(4) Requirements for insurers.
(i) In general.
(ii) Information included on return.
(5) Time and place for filing return.
(i) In general.
(ii) Return for nonresident alien individual.
(iii) Extensions of time.
(6) Use of magnetic media.
(c) Requirement to furnish statement.
(1) In general.
(2) Time and manner for furnishing statement.
(i) In general.
(ii) Statement to nonresident alien individual.
(iii) Extensions of time.
(3) Copy of Form 1098-T.
(d) Special rules.
(1) Enrollment determined.

[[Page 77682]]

(2) Payments of qualified tuition and related expenses received or
collected by one or more persons.
(i) In general.
(ii) Exception.
(3) Governmental units.
(e) Penalty provisions.
(1) Failure to file correct returns.
(2) Failure to furnish correct information statements.
(3) Waiver of penalties for failures to include a correct TIN.
(i) In general.
(ii) Acting in a responsible manner.
(iii) Manner of soliciting TIN.
(4) Failure to furnish TIN.
(f) Effective date.
* * * * *

    3. Section 1.6050S-1 is added to read as follows:

Sec.  1.6050S-1  Information reporting for qualified tuition and
related expenses.

    (a) Information reporting requirement--(1) In general. Except as
provided in paragraph (a)(2) of this section, any eligible educational
institution (as defined in section 25A(f)(2) and the regulations
thereunder) (an institution) that enrolls (as determined under
paragraph (d)(1) of this section) any individual for any academic
period (as defined in the regulations under section 25A), and any
person that is engaged in a trade or business of making payments under
an insurance arrangement as reimbursements or refunds (or other similar
amounts) of qualified tuition and related expenses (as defined in
section 25A(f)(1) and the regulations thereunder) (an insurer) must--

    (i) File an information return, as described in paragraph (b) of
this section, with the Internal Revenue Service (IRS) with respect to
each individual described in paragraph (b) of this section; and

    (ii) Furnish a statement, as described in paragraph (c) of this
section, to each individual described in paragraph (c) of this section.

    (2) Exceptions--(i) No reporting by institution or insurer for
nonresident alien individuals. The information reporting requirements
of this section do not apply with respect to any individual who is a
nonresident alien (as defined in section 7701(b) and Sec.  301.7701(b)-
3 of this chapter) during the calendar year, unless the individual
requests the institution or insurer to report. If a nonresident alien
individual requests an institution or insurer to report, the
institution or insurer must comply with the requirements of this
section for the calendar year with respect to which the request is
made.

    (ii) No reporting by institutions for noncredit courses--(A) In
general. The information reporting requirements of this section do not
apply with respect to any course for which no academic credit is
offered by the institution.

    (B) Academic credit defined. Academic credit means credit offered
by an institution for the completion of course work leading toward a
post-secondary degree, certificate, or other recognized post-secondary
educational credential.

    (C) Example. The following example illustrates the rules of this
paragraph (a)(2)(ii):

    Example. Student A, a medical doctor, takes a course at
University X's medical school. Student A takes the course to fulfill
State Y's licensing requirement that medical doctors attend
continuing medical education courses each year. Student A is not
enrolled in a degree program at University X and takes the medical
course through University X's continuing professional education
division. University X does not offer credit toward a post-secondary
degree on an academic transcript for the completion of the course
but gives Student A a certificate of attendance upon completion.
Under this paragraph (a)(2)(ii), University X is not subject to the
information reporting requirements of section 6050S and this section
for the medical education course taken by Student A.

    (iii) No reporting by institutions for individuals whose qualified
tuition and related expenses are waived or are paid with scholarships.
The information reporting requirements of this section do not apply
with respect to any individual whose qualified tuition and related
expenses are waived in their entirety or are paid entirely with
scholarships.

    (iv) No reporting by institutions for individuals whose qualified
tuition and related expenses are covered by a formal billing
arrangement-- (A) In general. The information reporting requirements of
this section do not apply with respect to any individual whose
qualified tuition and related expenses are covered by a formal billing
arrangement as defined in paragraph (a)(2)(iv)(B) of this section.

    (B) Formal billing arrangement defined. A formal billing
arrangement means--

    (1) An arrangement in which the institution bills only an employer
for education furnished by the institution to an individual who is the
employer's employee and does not maintain a separate financial account
for that individual;

    (2) An arrangement in which the institution bills only a
governmental entity for education furnished by the institution to an
individual and does not maintain a separate financial account for that
individual; or

    (3) Any other similar arrangement in which the institution bills
only an institutional third party for education furnished to an
individual and does not maintain a separate financial account for that
individual, but only if designated as a formal billing arrangement by
the Commissioner in published guidance of general applicability or in
guidance directed to participants in specific arrangements.

    (b) Requirement to file return--(1) In general. Institutions may
elect to report either the information described in paragraph (b)(2) of
this section, or the information described in paragraph (b)(3) of this
section. Once an institution elects to report under either paragraph
(b)(2) or (3) of this section, the institution must use the same
reporting method for all calendar years in which it is required to file
returns, unless permission is granted to change reporting methods.
Paragraph (b)(2) of this section requires institutions to report, among
other information, the amount of payments received during the calendar
year for qualified tuition and related expenses. Institutions must
report separately adjustments made during the calendar year that relate
to payments received for qualified tuition and related expenses that
were reported for a prior calendar year. For purposes of paragraph
(b)(2) of this section, an adjustment made to payments received means a
reimbursement or refund. Paragraph (b)(3) requires institutions to
report, among other information, the amounts billed during the calendar
year for qualified tuition and related expenses. Institutions must
report separately adjustments made during the calendar year that relate
to amounts billed for qualified tuition and related expenses that were
reported for a prior calendar year. For purposes of paragraph (b)(3) of
this section, an adjustment made to amounts billed means a reduction in
charges. Insurers must report the information described in paragraph
(b)(4) of this section.

    (2) Information reporting requirements for institutions that elect
to report payments received for qualified tuition and related
expenses--(i) In general. Except as provided in paragraph (a)(2) of
this section, an institution reporting payments received for qualified
tuition and related expenses must file an information return with the
IRS on Form 1098-T, "Tuition Statement," with respect to each
individual enrolled (as determined in paragraph (d)(1) of this section)
for an academic period beginning during the calendar year or during a
prior calendar year and for whom a transaction described in paragraphs
(b)(2)(ii)(C), (E),

[[Page 77683]]

(F) or (G) of this section is made during the calendar year. An
institution may use a substitute Form 1098-T if the substitute form
complies with applicable revenue procedures relating to substitute
forms (see Sec.  601.601(d)(2) of this chapter).

    (ii) Information included on return. An institution reporting
payments received for qualified tuition and related expenses must
include on Form 1098-T--

    (A) The name, address, and taxpayer identification number (TIN)(as
defined in section 7701(a)(41)) of the institution;

    (B) The name, address, and TIN of the individual who is, or has
been, enrolled by the institution;

    (C) The amount of payments of qualified tuition and related
expenses that the institution received from any source with respect to
the individual during the calendar year;

    (D) An indication by the institution whether any payments received
for qualified tuition and related expenses reported for the calendar
year relate to an academic period that begins during the first three
months of the next calendar year;

    (E) The amount of any scholarships or grants for the payment of the
individual's costs of attendance that the institution administered and
processed during the calendar year;

    (F) The amount of any reimbursements or refunds of qualified
tuition and related expenses made during the calendar year with respect
to the individual that relate to payments of qualified tuition and
related expenses that were reported by the institution for a prior
calendar year;

    (G) The amount of any reductions to the amount of scholarships or
grants for the payment of the individual's costs of attendance that
were reported by the institution with respect to the individual for a
prior calendar year;

    (H) A statement or other indication showing whether the individual
was enrolled for at least half of the normal full-time work load for
the course of study the individual is pursuing for at least one
academic period that begins during the calendar year (see section 25A
and the regulations thereunder);

    (I) A statement or other indication showing whether the individual
was enrolled in a program leading to a graduate-level degree, graduate-
level certificate, or other recognized graduate-level educational
credential; and

    (J) Any other information required by Form 1098-T and its
instructions.

    (iii) Reportable amount of payments received for qualified tuition
and related expenses during calendar year determined. The amount of
payments received for qualified tuition and related expenses with
respect to an individual during the calendar year that is reportable on
Form 1098-T is determined by netting the amount of payments received
(as defined in paragraph (b)(2)(v) of this section) for qualified
tuition and related expenses during the calendar year against any
reimbursements or refunds (as defined in paragraph (b)(2)(vi) of this
section) made during the calendar year that relate to payments received
for qualified tuition and related expenses during the same calendar
year.

    (iv) Separate reporting of reimbursements or refunds of payments of
qualified tuition and related expenses that were reported for a prior
calendar year. An institution must separately report on Form 1098-T any
reimbursements or refunds (as defined in paragraph (b)(2)(vi) of this
section) made during the current calendar year that relate to payments
of qualified tuition and related expenses that were reported by the
institution for a prior calendar year. Such reimbursements or refunds
shall not be netted against the payments received for qualified tuition
and related expenses during the current calendar year.

    (v) Payments received for qualified tuition and related expenses
determined. For purposes of determining the amount of payments received
for qualified tuition and related expenses during a calendar year,
payments received with respect to an individual during the calendar
year from any source (except for any scholarship or grant that, by its
terms, must be applied to expenses other than qualified tuition and
related expenses, such as room and board) are treated as payments of
qualified tuition and related expenses up to the total amount billed by
the institution for such expenses. For purposes of this section, a
payment includes any positive account balance (such as any
reimbursement or refund credited to an individual's account) that an
institution applies toward current charges.

    (vi) Reimbursements or refunds of payments for qualified tuition
and related expenses determined. For purposes of determining the amount
of reimbursements or refunds made of payments received for qualified
tuition and related expenses, any reimbursement or refund made with
respect to an individual during a calendar year (except for any refund
of a scholarship or grant that, by its terms, was required to be
applied to expenses other than qualified tuition and related expenses,
such as room and board) is treated as a reimbursement or refund of
payments for qualified tuition and related expenses up to the amount of
any reduction in charges for such expenses. For purposes of this
section, a reimbursement or refund includes amounts that an institution
credits to an individual's account, as well as amounts disbursed to, or
on behalf of, the individual.

    (vii) Examples. The following examples illustrate the rules in this
paragraph (b)(2):

    Example 1. (i) In early August 2003, University X bills enrolled
Student A $10,000 for qualified tuition and related expenses and
$6,000 for room and board for the 2003 Fall semester. In late August
2003, Student A pays $11,000 to University X. In early September
2003, Student A drops to half-time enrollment for the 2003 Fall
semester. In late September 2003, University X credits $5,000 to
Student A's account, reflecting a $5,000 reduction in charges for
qualified tuition and related expenses. In late September 2003,
University X applies the $5,000 positive account balance toward
current charges.

    (ii) Under paragraph (b)(2)(v) of this section, the $11,000
payment is treated as a payment of qualified tuition and related
expenses up to the $10,000 billed for qualified tuition and related
expenses. Under paragraph (b)(2)(vi) of this section, the $5,000
credited to the student's account is treated as a reimbursement or
refund of payments for qualified tuition and related expenses,
because the current year charges for qualified tuition and related
expenses were reduced by $5,000. Under paragraph (b)(2)(iii) of this
section, University X is required to net the $10,000 payment
received for qualified tuition and related expenses during 2003
against the $5,000 reimbursement or refund of payments received for
qualified tuition and related expenses during 2003. Therefore,
Institution X is required to report $5,000 of payments received for
qualified tuition and related expenses during 2003.

    Example 2. (i) The facts are the same as in Example 1, except
that Student A pays the full $16,000 in late August 2003. In late
September 2003, University X reduces the tuition charges by $5,000
and issues a $5,000 refund to Student A.

    (ii) Under paragraph (b)(2)(v) of this section, the $16,000
payment is treated as a payment of qualified tuition and related
expenses up to the $10,000 billed for qualified tuition and related
expenses. Under paragraph (b)(2)(vi) of this section, the $5,000
refund is treated as reimbursement or refund of payments for
qualified tuition and related expenses, because the current year
charges for qualified tuition and related expenses were reduced by
$5,000. Under paragraph (b)(2)(iii) of this section, University X is
required to net the $10,000 payment received for qualified tuition
and related expenses during 2003 against the $5,000 reimbursement or
refund of payments received for qualified tuition and related
expenses during 2003. Therefore, Institution X is required to report
$5,000 of payments received for qualified tuition and related
expenses during 2003.

[[Page 77684]]

    Example 3. (i) The facts are the same as in Example 1, except
that Student A is enrolled full-time, and, in early September 2003,
Student A decides to live at home with her parents. In late
September 2003, University X adjusts Student A's account to
eliminate room and board charges and issues a $1,000 refund to
Student A.

    (ii) Under paragraph (b)(2)(v) of this section, the $11,000
payment is treated as a payment of qualified tuition and related
expenses up to the $10,000 billed for qualified tuition and related
expenses. Under paragraph (b)(2)(vi) of this section, the $1,000
refund is not treated as reimbursement or refund of payments for
qualified tuition and related expenses, because there is no
reduction in charges for qualified tuition and related expenses.
Therefore, under paragraph (b)(2)(iii) of this section, University X
is required to report $10,000 of payments received for qualified
tuition and related expenses during 2003.

    Example 4. (i) In early December 2003, College Y bills enrolled
Student B $10,000 for qualified tuition and related expenses and
$6,000 for room and board for the 2004 Spring semester. In late
December 2003, Student B pays $16,000. In mid-January 2004, after
the 2004 Spring semester classes begin, Student B drops to half-time
enrollment. In mid-January 2004, College Y credits Student B's
account with $5,000, reflecting a $5,000 reduction in charges for
qualified tuition and related expenses, but does not issue a refund
to Student B. In early August 2004, College Y bills Student B
$10,000 for qualified tuition and related expenses $6,000 for room
and board for the 2004 Fall semester. In early September 2004,
College Y applies the $5,000 positive account balance toward Student
B's $16,000 bill for the 2004 Fall semester. In late September 2004,
Student B pays $6,000 towards the charges.

    (ii) In the reporting for calendar year 2003, under paragraph
(b)(2)(v) of this section, the $16,000 payment in December 2003 is
treated as a payment of qualified tuition and related expenses up to
the $10,000 billed for qualified tuition and related expenses. Under
paragraph (b)(2)(iii) of this section, College Y is required to
report $10,000 of payments received for qualified tuition and
related expenses during 2003. In addition, College Y is required to
indicate that the payments reported for 2003 relate to an academic
period that begins during the first three months of the next
calendar year.

    (iii) In the reporting for calendar year 2004, under paragraph
(b)(2)(vi) of this section, the $5,000 credited to Student B's
account is treated as a reimbursement or refund of qualified tuition
and related expenses, because the charges for qualified tuition and
related expenses were reduced by $5,000. Under paragraph (b)(2)(iv)
of this section, the $5,000 reimbursement or refund of qualified
tuition and related expenses must be separately reported on Form
1098-T because it relates to payments of qualified tuition and
related expenses reported by College Y for 2003. Under paragraph
(b)(2)(v) of this section, the $5,000 positive account balance that
is applied toward charges for the 2004 Fall semester is treated as a
payment. Therefore, College Y received total payments of $11,000
during 2004 (the $5,000 credit plus the $6,000 payment). Under
paragraph (b)(2)(v) of this section, the $11,000 of total payments
are treated as a payment of qualified tuition and related expenses
up to the $10,000 billed for such expenses. Therefore, for 2004,
College Y is required to report $10,000 of payments received for
qualified tuition and related expenses during 2004 and a $5,000
refund of payments of qualified tuition and related expenses
reported for 2003.

    (3) Information reporting requirements for institutions that elect
to report amounts billed for qualified tuition and related expenses--
(i) In general. Except as provided in paragraph (a)(2) of this section,
an institution reporting amounts billed for qualified tuition and
related expenses must file an information return on Form 1098-T with
respect to each individual enrolled (as determined in paragraph (d)(1)
of this section) for an academic period beginning during the calendar
year or during a prior calendar year and for whom a transaction
described in paragraphs (b)(3)(ii)(C), (E), (F) or (G) of this section
is made during the calendar year. An institution may use a substitute
Form 1098-T if the substitute form complies with applicable revenue
procedures relating to substitute forms (see Sec.  601.601(d)(2) of
this chapter).

    (ii) Information included on return. An institution reporting
amounts billed for qualified tuition and related expenses must include
on Form 1098-T--

    (A) The name, address, and taxpayer identification number (TIN)(as
defined in section 7701(a)(41)) of the institution;

    (B) The name, address, and TIN of the individual who is, or has
been, enrolled by the institution;

    (C) The amount billed for qualified tuition and related expenses
with respect to the individual during the calendar year;

    (D) An indication by the institution whether any amounts billed for
qualified tuition and related expenses reported for the calendar year
relate to an academic period that begins during the first three months
of the next calendar year;

    (E) The amount of any scholarships or grants for the payment of the
individual's costs of attendance that the institution administered and
processed during the calendar year;

    (F) The amount of any reductions in charges made during the
calendar year with respect to the individual that relate to amounts
billed for qualified tuition and related expenses that were reported by
the institution for a prior calendar year;

    (G) The amount of any reductions to the amount of scholarships or
grants for the payment of the individual's costs of attendance that
were reported by the institution with respect to the individual for a
prior calendar year;

    (H) A statement or other indication showing whether the individual
was enrolled for at least half of the normal full-time work load for
the course of study the individual is pursuing for at least one
academic period that begins during the calendar year (see section 25A
and the regulations thereunder);

    (I) A statement or other indication showing whether the individual
was enrolled in a program leading to a graduate-level degree, graduate-
level certificate, or other recognized graduate-level educational
credential; and

    (J) Any other information required by Form 1098-T and its
instructions.

    (iii) Reportable amounts billed for qualified tuition and related
expenses during calendar year determined. The amount billed for
qualified tuition and related expenses with respect to an individual
during the calendar year that is reportable on Form 1098-T is
determined by netting the amounts billed for qualified tuition and
related expenses during the calendar year against any reductions in
charges for qualified tuition and related expenses made during the
calendar year that relate to amounts billed for qualified tuition and
related expenses during the same calendar year.

    (iv) Separate reporting of reductions made to amounts billed for
qualified tuition and related expenses that were reported for a prior
calendar year. An institution must separately report on Form 1098-T any
reductions in charges made during the current calendar year that relate
to amounts billed for qualified tuition and related expenses that were
reported by the institution for a prior calendar year. Such reductions
shall not be netted against amounts billed for qualified tuition and
related expenses during the current calendar year.

    (v) Examples. The following examples illustrate the rules in this
paragraph (b)(3):

    Example 1. (i) In early August 2003, University X bills enrolled
Student A $10,000 for qualified tuition and related expenses and
$6,000 for room and board for the 2003 Fall semester. In late August
2003, Student A pays $11,000 to University X. In early September
2003, Student A drops to half-time enrollment for the 2003 Fall
semester. In late September 2003, University X adjusts Student A's
account and reduces the charges for qualified tuition and related
expenses by $5,000 to reflect half-time enrollment. In late
September 2003,

[[Page 77685]]

University X applies the $5,000 account balance toward current
charges.

    (ii) Under paragraph (b)(3)(iii) of this section, University X
is required to net the $10,000 amount of qualified tuition and
related expenses billed during 2003 against the $5,000 reduction in
charges for qualified tuition and related expenses during 2003.
Therefore, Institution X is required to report $5,000 in amounts
billed for qualified tuition and related expenses during 2003.

    Example 2. (i) The facts are the same as in Example 1, except
that, in addition, in early December 2003, College X bills Student A
$10,000 for qualified tuition and related expenses and $6,000 for
room and board for the 2004 Spring semester. In early January 2004,
Student A pays $16,000. In mid-January 2004, after the 2004 Spring
semester classes begin, Student A drops to half-time enrollment. In
mid-January 2004, College X credits $5,000 to Student A's account,
reflecting a $5,000 reduction in charges for qualified tuition and
related expenses, but does not issue a refund check to Student A. In
early August 2004, College X bills Student A $10,000 for qualified
tuition and related expenses and $6,000 for room and board for the
2004 Fall semester. In early September 2004, College X applies the
$5,000 positive account balance toward Student A's $16,000 bill for
the 2004 Fall semester. In late September 2004, Student A pays
$6,000 toward the charges.

    (ii) In the reporting for calendar year 2003, under paragraph
(b)(3)(iii) of this section, College X is required to report $15,000
amounts billed for qualified tuition and related expenses during
2003 ($5,000 for the 2003 Fall semester and $10,000 for the 2004
Spring semester). In addition, College X is required to indicate
that some of the amounts billed for qualified tuition and related
expenses reported for 2003 relate to an academic period that begins
during the first three months of the next calendar year.

    (iii) In the reporting for calendar year 2004, under paragraph
(b)(3)(iv) of this section, the $5,000 reduction in charges for
qualified tuition and related expenses must be separately reported
on Form 1098-T because it relates to amounts billed for qualified
tuition and related expenses that were reported by College X for
2003. Under paragraph (b)(3)(iii) of this section, College X is
required to report $10,000 in amounts billed for qualified tuition
and related expenses during 2004.

    (4) Requirements for insurers--(i) In general. Except as otherwise
provided in this section, an insurer must file an information return
for each individual with respect to whom reimbursements or refunds of
qualified tuition and related expenses are made during the calendar
year on Form 1098-T. An insurer may use a substitute Form 1098-T if the
substitute form complies with applicable revenue procedures relating to
substitute forms (see Sec.  601.601(d)(2) of this chapter).

    (ii) Information included on return. An insurer must include on
Form 1098-T--

    (A) The name, address, and taxpayer identification number (TIN) (as
defined in section 7701(a)(41)) of the insurer;

    (B) The name, address, and TIN of the individual with respect to
whom reimbursements or refunds of qualified tuition and related
expenses were made;

    (C) The aggregate amount of reimbursements or refunds of qualified
tuition and related expenses that the insurer made with respect to the
individual during the calendar year; and

    (D) Any other information required by Form 1098-T and its
instructions.

    (5) Time and place for filing return--(i) In general. Except as
provided in paragraphs (b)(5)(ii) and (iii) of this section, Form 1098-
T must be filed on or before February 28 (March 31 if filed
electronically) of the year following the calendar year in which
payments were received, or amounts were billed, for qualified tuition
or related expenses, or reimbursements, refunds, or reductions of such
amounts were made. An institution or insurer must file Form 1098-T with
the IRS according to the instructions to Form 1098-T.

    (ii) Return for nonresident alien individual. In general, an
institution or insurer is not required to file a return on behalf of a
nonresident alien individual. However, if a nonresident alien
individual requests an institution or insurer to report, the
institution or insurer must file a return described in paragraph (b) of
this section with the IRS on or before the date prescribed in paragraph
(b)(5)(i) of this section, or on or before the thirtieth day after the
request, whichever is later.

    (iii) Extensions of time. The IRS may grant an institution or
insurer an extension of time to file returns required in this section
upon a showing of good cause. See General Instructions for Forms 1099
series, 1098 series, 5498 series, and W-2G, "Certain Gambling
Winnings," and applicable revenue procedures for rules relating to
extensions of time to file (see Sec.  601.601(d)(2) of this chapter).

    (6) Use of magnetic media. See section 6011(e) and Sec.  301.6011-2
of this chapter for rules relating to the requirement to file Forms
1098-T on magnetic media.

    (c) Requirement to furnish statement--(1) In general. An
institution or insurer must furnish a statement to each individual for
whom it is required to file a Form 1098-T. The statement must include--

    (i) The information required under paragraph (b) of this section;

    (ii) A legend that identifies the statement as important tax
information that is being furnished to the IRS;

    (iii) Instructions that--

    (A) State that the statement reports either total payments received
by the institution for qualified tuition and related expenses during
the calendar year, or total amounts billed by the institution for
qualified tuition and related expenses during the calendar year, or the
total reimbursements or refunds made by the insurer;

    (B) State that, under section 25A and the regulations thereunder,
the taxpayer may claim an education tax credit only with respect to
qualified tuition and related expenses actually paid during the
calendar year; and that the taxpayer may not be able to claim an
education tax credit with respect to the entire amount of payments
received, or amounts billed, for qualified tuition and related expenses
reported for the calendar year;

    (C) State that the amount of any scholarships or grants reported
for the calendar year and other similar amounts not reported (because
they are not administered and processed by the institution) may reduce
the amount of any allowable education tax credit for the taxable year;

    (D) State that the amount of any reimbursements or refunds of
payments received, or reductions in charges, for qualified tuition and
related expenses, or any reductions to the amount of scholarships or
grants, reported by the institution with respect to the individual for
a prior calendar year may affect the amount of any allowable education
tax credit for the prior calendar year (and may result in an increase
in tax liability for the year of the refund);

    (E) State that the amount of any reimbursements or refunds of
qualified tuition and related expenses reported by an insurer may
reduce the amount of an allowable education tax credit for a taxable
year (and may result in an increase in tax liability for the year of
the refund);

    (F) State that the taxpayer should refer to relevant IRS forms and
publications, and should not refer to the institution or the insurer,
for explanations relating to the eligibility requirements for, and
calculation of, any allowable education tax credit; and

    (G) Include the name, address, and phone number of the information
contact of the institution or insurer that filed the Form 1098-T.

    (2) Time and manner for furnishing statement--(i) In general.
Except as provided in paragraphs (c)(2)(ii) and (iii) of this section,
an institution or insurer must furnish the statement described in
paragraph (c)(1) of this section to each individual for whom it is
required to file a return, on or before January 31 of the

[[Page 77686]]

year following the calendar year in which payments were received, or
amounts were billed, for qualified tuition and related expenses, or
reimbursements, refunds, or reductions of such amounts were made. If
mailed, the statement must be sent to the individual's permanent
address, or the individual's temporary address if the institution or
insurer does not know the individual's permanent address. If furnished
electronically, the statement must be furnished in accordance with the
applicable regulations.

    (ii) Statement to nonresident alien individual. If an information
return is filed for a nonresident alien individual, the institution or
insurer must furnish a statement described in paragraph (c)(1) of this
section to the individual in the manner prescribed in paragraph
(c)(2)(i) of this section. The statement must be furnished on or before
the later of the date prescribed in paragraph (c)(2)(i) of this section
or the thirtieth day after the nonresident alien's request to report.

    (iii) Extensions of time. The IRS may grant an institution or
insurer an extension of time to furnish the statements required in this
section upon a showing of good cause. See General Instructions for
Forms 1099 series, 1098 series, 5498 series, and W-2G, "Certain
Gambling Winnings," and applicable revenue procedures for rules
relating to extensions of time to furnish statements (see Sec.
601.601(d)(2) of this chapter).

    (3) Copy of Form 1098-T. An institution or insurer may satisfy the
requirement of this paragraph (c) by furnishing either a copy of Form
1098-T and its instructions or another document that contains all of
the information filed with the IRS and the information required by
paragraph (c)(1) of this section if the document complies with
applicable revenue procedures relating to substitute statements (see
Sec.  601.601(d)(2) of this chapter).

    (d) Special rules--(1) Enrollment determined. An institution may
determine its enrollment for each academic period under its own rules
and policies for determining enrollment or as of any of the following
dates--

    (i) 30 days after the first day of the academic period;

    (ii) A date during the academic period on which enrollment data
must be collected for purposes of the Integrated Post Secondary
Education Data System administered by the Department of Education; or

    (iii) A date during the academic period on which the institution
must report enrollment data to the State, the institution's governing
body, or some other external governing body.

    (2) Payments of qualified tuition and related expenses received or
collected by one or more persons--(i) In general. Except as otherwise
provided in paragraph (d)(2)(ii) of this section, if a person collects
or receives payments of qualified tuition and related expenses on
behalf of another person (e.g., an institution), the person collecting
or receiving payments must satisfy the requirements of paragraphs (b)
and (c) of this section. In this case, those requirements do not apply
to the transfer of the payments to the institution.

    (ii) Exception. If the person collecting or receiving payments of
qualified tuition and related expenses on behalf of another person
(e.g., an institution) does not possess the information needed to
comply with the requirements of paragraphs (b) and (c) of this section,
the other person must satisfy those requirements.

    (3) Governmental units. An institution or insurer that is a
governmental unit, or an agency or instrumentality of a governmental
unit, is subject to the requirements of paragraphs (b) and (c) of this
section and an appropriately designated officer or employee of the
governmental entity must satisfy those requirements.

    (e) Penalty provisions--(1) Failure to file correct returns. The
section 6721 penalty may apply to an institution or insurer that fails
to file information returns required by section 6050S and this section
on or before the required filing date; that fails to include all of the
required information on the return; or that includes incorrect
information on the return. See section 6721, and the regulations
thereunder, for rules relating to penalties for failure to file correct
returns. See section 6724, and the regulations thereunder, for rules
relating to waivers of penalties for certain failures due to reasonable
cause.

    (2) Failure to furnish correct information statements. The section
6722 penalty may apply to an institution or insurer that fails to
furnish statements required by section 6050S and this section on or
before the prescribed date; that fails to include all the required
information on the statement; or that includes incorrect information on
the statement. See section 6722, and the regulations thereunder, for
rules relating to penalties for failure to furnish correct statements.
See section 6724, and the regulations thereunder, for rules relating to
waivers of penalties for certain failures due to reasonable cause.

    (3) Waiver of penalties for failures to include a correct TIN--(i)
In general. In the case of a failure to include a correct TIN on Form
1098-T or a related information statement, penalties may be waived if
the failure is due to reasonable cause. Reasonable cause may be
established if the failure arose from events beyond the institution's
or insurer's control, such as a failure of the individual to furnish a
correct TIN. However, the institution or insurer must establish that it
acted in a responsible manner both before and after the failure.

    (ii) Acting in a responsible manner. An institution or insurer must
request the TIN of each individual for whom it is required to file a
return if it does not already have a record of the individual's correct
TIN. If the institution or insurer does not have a record of the
individual's correct TIN, then it must solicit the TIN in the manner
described in paragraph (e)(3)(iii) of this section on or before
December 31 of each year during which it receives payments, or bills
amounts, for qualified tuition and related expenses or makes
reimbursements, refunds, or reductions of such amounts with respect to
the individual. If an individual refuses to provide his or her TIN upon
request, the institution or insurer must file the return and furnish
the statement required by this section without the individual's TIN,
but with all other required information. The specific solicitation
requirements of paragraph (e)(3)(iii) of this section apply in lieu of
the solicitation requirements of Sec.  301.6724-1(e) and (f) of this
chapter for the purpose of determining whether an institution or
insurer acted in a responsible manner in attempting to obtain a correct
TIN. An institution or insurer that complies with the requirements of
this paragraph (e)(3) will be considered to have acted in a responsible
manner within the meaning of Sec.  301.6724-1(d) of this chapter with
respect to any failure to include the correct TIN of an individual on a
return or statement required by section 6050S and this section.

    (iii) Manner of soliciting TIN. An institution or insurer must
request the individual's TIN in writing and must clearly notify the
individual that the law requires the individual to furnish a TIN so
that it may be included on an information return filed by the
institution or insurer. A request for a TIN made on Form W-9S,
"Request for Student's or Borrower's Taxpayer Identification Number
and Certification," satisfies the requirements of this paragraph
(e)(3)(iii). An institution or insurer may establish a system for
individuals to submit Forms W-9S electronically as described in
applicable forms and instructions. An institution or insurer may also
develop

[[Page 77687]]

a separate form to request the individual's TIN or incorporate the
request into other forms customarily used by the institution or
insurer, such as admission or enrollment forms or financial aid
applications.

    (4) Failure to furnish TIN. The section 6723 penalty may apply to
any individual who is required (but fails) to furnish his or her TIN to
an institution or insurer. See section 6723, and the regulations
thereunder, for rules relating to the penalty for failure to furnish a
TIN.

    (f) Effective date. The rules in this section apply to information
returns required to be filed, and information statements required to be
furnished, after December 31, 2003.

PART 301--PROCEDURE AND ADMINISTRATION

    4. The authority citation for part 301 continues to read in part as
follows:

    Authority: 26 U.S.C. 7805 * * *

    5. Section 301.6011-2 is amended as follows:

    1. In paragraph (b)(1), first sentence, add the language "1098-
T," immediately after the language "1098-E,".

    2. Revise paragraph (g)(3).
    The revision reads as follows:

Sec.  301.6011-2  Required use of magnetic media.

* * * * *

    (g) * * *

    (3) This section applies to returns on Forms 1098-E, "Student Loan
Interest Statement," and 1098-T, "Tuition Statement," filed after
December 31, 2003.

PART 602--OMB CONTROL NUMBERS UNDER THE PAPERWORK REDUCTION ACT

    6. The authority citation for part 602 continues to read as
follows:

    Authority: 26 U.S.C. 7805.

    7. In Sec.  602.101, paragraph (b) is amended by adding an entry in
numerical order to the table to read as follows:

Sec.  602.101  OMB Control numbers.

* * * * *

    (b) * * *

------------------------------------------------------------------------
                                                               Current
     CFR part or section where identified and described      Control OMB
                                                                 No.
------------------------------------------------------------------------

                                * * * * *
1.6050S-1..................................................    1545-1678

                                * * * * *
------------------------------------------------------------------------

David A. Mader,
Assistant Deputy Commissioner--Internal Revenue.

Approved: December 12, 2002.
Pamela F. Olson,
Assistant Secretary of the Treasury.

[FR Doc. 02-31915 Filed 12-18-02; 8:45 am]
BILLING CODE 4830-01-P

---

Source document: 67 Fed. Reg. 77678-77687 (December 19, 2002)

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