Verification

1. Verification

2. Verification - Definitions • Subsidized student financial assistance • programs • Verification applies to Title IV programs where eligibility based upon Expected Family Contribution • Pell, FSEOG, FWS, Perkins, Direct Subsidized Loan

3. Verification - Definitions • Unsubsidized student financial assistance programs Verification does not apply to Title IV programs where eligibility not based Upon Expected Family Contribution • TEACH Grant, Direct Unsubsidized Loan, Direct PLUS Loan, Iraq and Afghanistan Service Grant

4. Verification – Changes To FAFSA Information • For subsidized programs, all changes resulting from verification must be submitted to CPS if change is • To any non-dollar item or • A single dollar item of $25 or more • If required to submit one change, must submit all changes

5. Verification & Professional Judgment • All applicants selected for verification (either by ED or school) must complete verification before any PJ adjustments to FAFSA • School’s written verification policies and procedures must include statement that no adjustments can be made until verification is completed

6. Verification & Professional Judgment • If applicant NOT selected for verification: • Verification NOT required • May perform PJ as usual

7. Verification Selection • Institutions must verify all applicants selected by CPS for verification • Removes institution’s option to verify only 30% of applicant pool

8. Verification - Exclusions No verification required if – • Applicant is eligible to receive only unsubsidized aid • Applicant received no aid for reasons other than failure to complete verification • Transfer student already completed verification for the award year at a prior school • Current school must collect statement from prior school, providing transaction number of applicable ISIR • Current school must pay on verified transaction • Death of applicant

9. Verification - Exclusions • Not required to verify FAFSA information for parents of dependent student or spouse of independent student if parents/spouse • Reside outside U.S. and cannot be contacted by normal means of communication • Cannot be located because contact information is unknown and cannot be obtained • Mentally incapacitated • Deceased (spouse)

10. Verification – Marital Status • Updating Marital Status: • MAY require student to update FAFSA if change in marital status necessary to address an inequity or reflect more accurately ability to pay • FAFSA needs to reflect accurate household size, number in college, dependency status and family financial information

11. Acceptable Documentation • School may require an individual granted a tax filing extension to provide a copy of their completed and signed tax return when filed • If school receives a copy of the return, it MUST verify AGI and taxes paid • Tax returns submitted with preparer signature (wet, stamped, typed or printed) with the name and address of the preparer must also have their SSN, EIN, or PTIN

12. Verification & Interim Disbursements Interim disbursements may be made without receipt of corrected ISIR if completed verification does not change aid eligibility • However all required corrections must be submitted to CPS and school must receive revised ISIR transaction

13. Verification & Increasing Pell Eligibility • No longer limits student to lesser Pell award if verification completed after enrollment • Student would receive Pell payment based upon correct EFC • Must have valid ISIR to support disbursements

14. Information to be Verified Beginning with 2012-13, ED will publish a Federal Register Notice prior to beginning of each award year’s FAFSA processing listing possible verifiable items and acceptable documentation • SAR/ISIR will specify required verification items for applicant

15. Verification Dear Colleague Letter DCL GEN-11-13 Federal Register published July 13, 2011 details FAFSA information to be verified for AY 2012-13 Summarizes the verification process for the 2012-13 award year Citations: 34 CFR §§ 668.51 through 668.61

16. 2012-13 Verification Items All Applicants Number in Household Not required if: • Dependent student household size reported is two and the parent is unmarried or three if the parent is married • Independent student household reported is one and the applicant is unmarried or two if the applicant is married

17. 2012-13 Verification Items All Applicants - Number in College • Not required if reported is one • Provide name and age of each household member who is or will be attending an eligible postsecondary educational institution as at least a half-time student in the 2012-2013 award year and the name of the eligible institution(s) that each household member is or will be attending

18. 2012-13 Verification Items All Applicants Food Stamps, if receipt reported on FAFSA • Documentation from the agency that issues Food Stamps benefit or alternative documentation as determined by the institution to be sufficient to confirm that the applicant received Food Stamps in 2010 or 2011

19. 2012-13 Verification Items All Applicants – Child support paid if amount reported on FAFSA • Statement signed by the applicant, spouse, or parent who paid the child support certifying: • Amount of child support paid • Name of the person to whom child support was paid • The name of the children for whom child support was paid

20. 2012-13 Verification Items Tax Filers- From IRS Data Retrieval • Adjusted Gross Income (AGI) • Taxes paid • Specific untaxed income items from tax return - • Untaxed IRA distributions • Untaxed pensions • Education credits • IRA deductions • Tax exempt interest

21. 2012-13 Verification Items Nontax Filers • Copy of IRS Form W-2 for each source of employment income received for tax year 2011 • A signed statement certifying: • That the individual has not filed and is not required to file an income tax return for tax year 2011 • The sources of income earned from work as reported on the FAFSA and amounts of income from each source for tax year 2011 that is not on W-2s

22. 2012-13 Documentation • Comprehensive list in July 13, 2011 Federal Register notice • IRS Data Retrieval Process • IRS Transcript Request On-Line at IRS website: www.irs.gov IRS Toll free number: (800)908-9946 Obtain form 4506T-EZ online and mail to IRS: http://www.irs.gov/pub/irs-pdf/f4506tez.pdf • IRS Tax Return: Limited conditions

23. IRS Data and Verification For 2011-12 • An institution may consider IRS retrieved information as acceptable verification documentation if • The Secretary has identified those items as having come from the IRS and have not been changed • IRS Request Flag = 02

24. IRS Data Retrieval • CPS will set flags and comment codes to indicate that the student and/or parent transferred IRS data into FOTW • Comment codes will appear in: • FAA Information section of the ISIR • Student Inquiry section of FAA Access • Flags and codes set based on certain conditions

25. IRS Request Flag Values IRS Request Flag on ISIR will begin to be populated

26. IRS Data Retrieval Tool 2012-2013 FAFSA on the Web will include logic to make the determination for the applicant.

27. IRS Tax Return Transcript Required A tax transcript is required when: the IRS Data Retrieval Process was not used the IRS Data Retrieval Process was used, but data was subsequently changed a married independent applicant and spouse filed separate tax returns. the parents of a dependent student filed separate tax returns.

28. IRS Tax Return Transcript Required A tax transcript is also required when: an applicant or applicant’s parent had a change in marital status after the end of the tax year on December 31, 2011. the applicant, or parent or spouse, as applicable, filed an amended tax return. Signature of tax filer on IRS Tax Return Transcripts does not have to be signed by the tax filer (but is a good practice)

29. Verification Using the IRS Data Retrieval Process is the fastest, easiest, and most secure way to meet verification requirements May be done at either of two points: *initially FOTW filing *when using FOTW corrections

30. Ordering an IRS Account Transcript—Three Methods

31. Ordering an IRS Account Transcript—Method One: IRS WEBSITE

32. Ordering an IRS Account Transcript Heightened Cash Monitoring 2 (HCM2)/Reimbursement Heightened Cash Monitoring 1 (HCM1) Advanced Payment

33. Ordering an IRS Account Transcript online (Steps 1-3)

34. Ordering an IRS Account Transcript online (Steps 4-6)

35. Ordering an IRS Account Transcript—Method Two: TELEPHONE

36. Ordering an IRS Account Transcript by Telephone

37. Ordering an IRS Account Transcript by Telephone

38. Ordering an IRS Account Transcript—Method Three: PAPER FORM

39. Ordering an IRS Account Transcript by Paper Form

40. Ordering an IRS Account Transcript by Paper Form

41. Ordering an IRS Account Transcript by Paper • Processing form 4506T-EZ means validating the information provided on the form. • If any information does not match the IRS records, the IRS will notify the tax filer that it was not able to provide the transcript.

42. Things to Know about theIRS Account Transcript • Tax filers can expect to receive a paper IRS Tax Return Transcript within 5 -10 days of successful validation • IRS Tax Return Transcripts requested online cannot be sent to a 3rd party if processed by web or phone order

43. Tax Transcript Sample (Part 1)

44. Tax Transcript Sample (Part 2)

45. Tax Transcript Sample (Part 3)

46. Tax Transcript Sample (Part 4)

47. Tax Transcript Sample (Part 5)

48. Tax Transcript Sample (Part 6) Tax and Credits (cont.)

49. Tax Transcript Sample (Part 7)

50. Tax Transcript Sample (Part 8)