colleague to colleague: unraveling and analyzing federal policy changes for verification
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SHARI AREHARTOperations AnalystJames Madison University
Effective date for verification: July 1, 2012 Eliminates the 30 percent institutional
verification cap Eliminates the $400.00 tolerance; replaces
with $25.00 tolerance Verification and “Official ISIR” received
before completion of any Professional Judgment adjustments
Requires the processing of all changes and corrections to a student’s FAFSA information
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Replaces the standard five verification items with a “targeted selection of items”!
In English – “they choose and post - we verify”
The items to be verified and acceptable documentation can be found in the Federal Register
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ALL APPLICATIONS Number in household Number in college Food Stamps (SNAP) – if
reported on FAFSA Child Support Paid – if reported
on FAFSA
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TAX FILERS AGITaxes PaidUntaxed income items
Untaxed IRA distribution
Untaxed pensions Education credits IRA deductions Tax exempt interest
NON-TAX FILERS
Income earned from
work
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NUMBER IN HOUSEHOLD
“A signed statement”=
Verification Worksheet Name Age
Relationship
NUMBER IN COLLEGE
“A signed statement”=
Verification Worksheet Name Age
Eligible Institution
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Form needs to be signed by student and one parent (if dependent). No rule changes for who you can count in the house or in college.
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FOOD STAMPS
Documentation from the agency that issues the Food Stamps
Alternative documentation that confirms receipt of Food Stamps in either 2010 or 2011
CHILD SUPPORT PAID
Signed statement certifying:
• Amount paid• Recipient of payment• Name of child/children
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Alternative documentation:
• Separation agreement or divorce decree or
• Signed statement from individual receiving child support including amount received or
• Copy of support check
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IRS Data Retrieval
Must have valid SSN
Must have filed a 2011 federal tax return
Must have unchanged marital status since
December 31, 2011
Without subsequent changes to ISIR
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IRS Transcript and W-2
Invalid SSN
Separated, divorced, widowed
Married filing separate or married to a
different individual
Anytime FAFSA info doesn’t correlate with
taxes!
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TAX EXTENTIONS
IRS Form 4868 W-2 Signed statement
by self-employed individual certifying AGI and US taxes paid
NON-TAX FILERS
W-2 Signed statement =
Verification Worksheet indicating that they are not required to file and amount of income earned
Other income not reported on W-2
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If an institution determines that obtaining a transcript from the IRS is not possible, the institution may accept a copy of the signed 2011 income tax form.
If an individual who is required to submit a W-2 is unable to obtain one in a timely manner, the institution may accept a signed statement including: Income earned from work Source of income Reason W-2 is not available in timely manner
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NIRS Tax Return Transcript Request Process
Online – www.irs.gov
Select “ Order a Tax
Return or Account
Transcript”
Click “Order a Transcript”
Enter needed basic
information
Click “Continue”
Select “Return Transcript”
Should receive transcript
5-10 days
Cannot be sent directly to
the school
Telephone – 1-800-908-
9946
Option 2
Enter “2011”
Should receive transcript
5-10 days
Cannot be sent directly to
the school
Paper - IRS Form 4506T-EZ
Use instead of the 4506-T
Download at
http://www.irs.gov/pub/irs-
pdf/f4560tez.pdf
Form can be mailed or
faxed
Should receive transcript
5-10 days from the time the
IRS receives and process
the form
Problem – Line 5 of the
form lets the parent send
transcript to a third party.
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WHAT ELSE WILL YOU COLLECT???
EXERCISE
1WIC
Free or reduced lunch
Single parent Newlywed
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VERIFICATION WORKFLOW
By creating a workflow of your current verification processes – substituting in the new changes - you can understand the impact that these changes are going to have on your school.
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Timing constraints Income tax filing System delay –
filed electronically vs paper
Additional documentation
Awarding
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CHANGES TO POLICIES AND PROCEDURES
Updating dependency status for a change in a students marital status If change in marital
status creates an inequality or impacts the students ability to pay, schools may now choose to amend marital status.
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All Professional Judgments need to be verified – sent back to CPS (Central Processing Center) and returned with an “official” ISIR BEFORE any adjustments can be made!
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GETTING THE WORD OUT
EXERCISE
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Yes! Go back into your FAFSA
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Dear Colleague letters - http://ifap.ed.gov/ifap/byYear.jsp?type=dpcletters - GEN-11-03, February 2011 - GEN-11-13, July 2011
Federal Register Notice: July 13, 2011 - http://ifap.ed.gov/fregisters/attachments/FR071311FAFSAInformation.pdf
Jacquelyn Butler, U.S. Department of Education, Office of Postsecondary Education, (202) 502-7890, jacquelyn.butler@ed.gov
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QUESTIONS?
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