Scrooge arrived yesterday in the afternoon mail. I have an IRS notice about the 2015 tax return. The problem is about the education credits. They say I owe $400.
IRS are asking me: We need to verify the education credits you claimed on Form 1040....Education institutions can report either amounts you paid for qualified expenses or amounts they billed on Forms 1098 T. We don't consider amounts they billed you in box 2 as proof of actual expenses you paid. Provide a signed detailed explanation of the amounts you paid to support the amounts claimed.
My taxes are prepared for me by a local non-profit that provides free tax preparation and filing for people under $50K. I remember getting this form from my employer showing the cost of tuition for courses taken through an on-line program at a local University. I paid for the courses up front. I was reimbursed by my employer upon successfully completing the courses. I asked at the time, could I file this on the return. There was a line for the expense so we put it in and a credit came back to me. I am not sure if I owe or don't owe considering the circumstances.
It's taken the IRS since February to get back to me on this question, and they charged 4% interest too. I had no idea this was coming. I can prove I registered, paid for and completed the courses, but do I owe? They suggest reading Publication 970 Tax Benefits for Education. I assume it's on line somewhere.
I am off work until January 3. I can ask the benefits coordinator and payroll person about this situation when I get back, they might have insight on taxes. I can disagree with the statements and wait for a decision. But, they continue to charge interest on the amount outstanding.