Accredited Schools - Education Credits

[neilbrink]

Is there a master list somewhere that lists all of the institutions that are accredited for the purpose of a student qualifying for the Education Credit(s)? I have a 1098T for a student who attended a vocational school (International Skin Beauty Academy) at a cost of $9700. The 1098T form was hand-written, had no address given on the form, and the only box filled in was Box 1, for payments received. There was no check mark for half-time student. I asked client to call the Academy and question whether it was "accredited" and why no address. Client did that and was told that the forms are legitimate, a copy is sent in to the IRS, the address was not needed because the academy's federal ID number matches up the address at the IRS, and her students have never had a problem with taking the credit on their tax returns. At best, I am thinking the student could claim the Lifetime Credit. What due diligence do I have here? Thoughts?

[Jack from Ohio]

Is there a master list somewhere that lists all of the institutions that are accredited for the purpose of a student qualifying for the Education Credit(s)? I have a 1098T for a student who attended a vocational school (International Skin Beauty Academy) at a cost of $9700. The 1098T form was hand-written, had no address given on the form, and the only box filled in was Box 1, for payments received. There was no check mark for half-time student. I asked client to call the Academy and question whether it was "accredited" and why no address. Client did that and was told that the forms are legitimate, a copy is sent in to the IRS, the address was not needed because the academy's federal ID number matches up the address at the IRS, and her students have never had a problem with taking the credit on their tax returns. At best, I am thinking the student could claim the Lifetime Credit. What due diligence do I have here? Thoughts?

If the school is part of the Federal Education Assistance program, it is accredited. If the school has a number for use with the FAFSA program, it is accredited. The administration at the school are slackers for the way they handle the paperwork, and the student and student's family are the ones who pay the price for their slacking.

You can find the name and address of the school on the internet and use the FEIN number from the 1098T.

College business offices and financial aid offices give me indigestion and headaches by the apathetic way they treat students and parents in this area.

[neilbrink]

I just talked to the owner of this Academy. She tells me the Academy is not part of the Federal Education Assistance Program and not accredited with the Department of Education, but is accredited with the Dept of Professional Regulations. She says that this accreditation allows the student to take the Education credit. My gut feeling tells me this is not a situation where my client qualifies because of this accredition issue, but yet a Form 1098T was issued. If I choose to include the education expense with the education credit on the client's return, knowing that I suspect it may not be eligible, am I leaving myself in jeopardy?

[Lion EA]

Yes. What's the phrase in Circ. 230: Know or should have known...

[jainen]

>>accredited with the Dept of Professional Regulations<<

That is an Illinois state office. According to Pub 970, "An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U.S. Department of Education. It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. The educational institution should be able to tell you if it is an eligible educational institution."

There is no standard definition for accreditation. Since IRS says to ask the school, I would go by whatever the school tells you. Document who said what when, get the tax i.d. number and other required info, and take the credit if otherwise eligible.

[Guest Taxed]

Be careful! Last year I ran into a 1098-T that was computer generated but looked suspicious because of the name of the institution. So I researched it a bit and come to find out it is an ambulance company that gives practical lessons to recruits and actually pays them min. wage for doing the work and then turns around and issues a 1098T for what they paid!

[kcjenkins]

She tells me the Academy is not part of the Federal Education Assistance Program and not accredited with the Department of Education,

Based on that, I do not think it meets the description in Pub 970, "An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U.S. Department of Education.

[jainen]

>>eligible to participate<<

KC, in another thread this morning you said, "the gov should only pay for those who TRULY need care and TRULY are unable to pay." Can you believe that there are good schools that agree with you, that are eligible but choose not to accept federal aid with all its rules? Perhaps this midwestern vocational school only wants motivated students who can forge their own success and pay their own way without handouts.

Accreditation is not an official process; it is an undefined term for various private industry standards. According to Pub 970 as I quoted, "virtually all" schools are included. There is no requirement that a school actually submit paperwork to the U.S. Department of Education, if they are already regulated on the state level.

[SCL]

>>accredited with the Dept of Professional Regulations<<

That is an Illinois state office. According to Pub 970, "An eligible educational institution is any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U.S. Department of Education. It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. The educational institution should be able to tell you if it is an eligible educational institution."

There is no standard definition for accreditation. Since IRS says to ask the school, I would go by whatever the school tells you. Document who said what when, get the tax i.d. number and other required info, and take the credit if otherwise eligible.

i agree with jainen's reference to pub 970...and, therefore, the students ability to claim any allowed tuition tax credits.

i have no/(ok, just a little) doubt this vocational/beauty "school" is on board with receiving tuition payments from student loans administered through the us dept of educ.

for 20+ years, the federal government has encouraged and sponsored this growing $2 trillion+? student loan/pyramid scheme.

it is just another unfunded (deficit) fed program that some day will have to be paid for.

[neilbrink]

The owner states that they are not accredited with the US Dept of Education, they do not receive tuition payments through government loans or awards, and send out 1098Ts because they "have done it before and have never been told by the IRS that they should not be doing it".

[jainen]

>>they are not accredited with the US Dept of Education<<

NOBODY is, dig? Name me one school! How about Harvard? According to their web site, "Harvard University is accredited by the New England Association of Schools and Colleges (NEASC)." Yale explains, "The United States has six regional accreditation associations plus many other national accreditors for faith–based and career–oriented schools and for other specialized and professional programs. In contrast to other countries where quality assurance often is conducted by large governmental ministries, here this process is independent and peer–based."

It's the American way, and it's written into the tax regs.

[SCL]

I just talked to the owner of this Academy. She tells me the Academy is not part of the Federal Education Assistance Program and not accredited with the Department of Education, but is accredited with the Dept of Professional Regulations. She says that this accreditation allows the student to take the Education credit. My gut feeling tells me this is not a situation where my client qualifies because of this accredition issue, but yet a Form 1098T was issued. If I choose to include the education expense with the education credit on the client's return, knowing that I suspect it may not be eligible, am I leaving myself in jeopardy?

the question is: can/does this school accept federal government sponsored, student loan payments toward the student's tuition expenses?

[SCL]

The owner states that they are not accredited with the US Dept of Education, they do not receive tuition payments through government loans or awards, and send out 1098Ts because they "have done it before and have never been told by the IRS that they should not be doing it".

well, you have edited/updated your latest communication with the school...that "they do not receive tuition payments through government loans".

somehow, i hold this 2nd hand hearsay in reserve.

the "beauty" school i took the aoc stated in their literature that they accept student loan payments...as they say, your mileage may vary.

[neilbrink]

I know it has been several years since I sent my 3 kids through college, but I believe students still must complete and submit FAFSA forms in order receive Federal Student Aid. When they submit those forms, is there not a place on the form where the student must list the educational institution that they are considering using the financial aid for? In fact, isn't each "accredited" institution given a specific code number that is required to be fill in on that form, so that that institution can receive the information on how much financial aid that student is eligible for? Does the Dept of Education assign numbers to all educational institutions, even though they are not accredited by the Dept of Education? Why are there many educational institutions that choose not to be accredited with the Dept of Education not still sending out Form 1098T's to their students, similar to what this particular institution is?

[SCL]

you pose good questions...but, i think?

it is not about any "college aid" an individual student/family is eligible for, or not (for example, pay it all from your own resources whether or not you fill out a fafsa).

it depends on the macro college/fed government relationship...does the college accept fed gov loan payments.

you say the college in question told you they do not accept fed student loan payments...

you may be right, and i don't have any skin in this game, but i question that 2nd hand hearsay.