ED Reviewing Verification of Non-Filing Process

By Karen McCarthy, Policy & Federal Relations Staff

In a letter responding to a request—submitted by NASFAA and signed onto by the National Association for College Admission Counseling (NACAC), the National College Access Network (NCAN), and The Institute for College Access and Success (TICAS)—for relief of verification burden for non tax filers, ED states that it has begun working with the IRS to find ways to make the process of obtaining a verification of non-filing letter easier for families.

Lynn Mahaffie, Acting Assistant Secretary for Postsecondary Education, wrote that ED began work with the IRS prior to receiving NASFAA’s letter in December, but cited ED’s continued concerns about the number of FAFSA applicants who, while indicating on their FAFSA that they did not file a tax return, in fact did. The letter states that ED will continue to review this issue to determine if changes are necessary.

However, at a recent conference, ED staff announced plans to issue new guidance within the next several weeks on Verification of Non-filing (VONF) Letters from the Internal Revenue Service (IRS) that could allow for more flexibility in documenting non-filing status by expanding what is considered acceptable documentation. The letter gave no indication that such guidance was forthcoming.

ED also interpreted NASFAA’s letter to indicate a misunderstanding of the verification documentation requirements as applying to all non-filers, not only those who are selected for verification. NASFAA is aware that the verification documentation requirements apply only to applicants who are selected for verification.


Publication Date: 2/21/2017

Ryan C | 2/23/2017 2:22:46 PM

I would add I'm a little surprised that among all of our responses to the DOE, Justin's letter included, we haven't asked about the impact prior prior year would actually have on that 15%. Among that 15%, how many chose "will not file" on the FAFSA between Jan-March who then subsequently decided to file once the deadline in mid-April arrived. I would love to see some of that data as it would be easily identifiable. It seems rather than seemingly jumping the gun it would have been better to hold off one year while we wait to see how prior-prior impacts the data since the tax filing deadline will have long since passed. If a VONF is still required then I'm all for it for 18-19 just over-estimate demand, set up tools in the DRT to accommodate, and provide the IRS the resources and communication it needs to handle paper requests. I was very surprised that the only two sources of retrieving the VONF were the online PDF which is difficult to establish for a very large portion of the student body (especially young freshman without credit, phone, etc personal accounts) and fax. The majority of VONFs we've had to do have been via fax. I don't blame them for not seemingly have thought this all the way through. It's not usually possible to think these kinds of things all the way through unless you're in the front lines. My hope is the DOE will be humble enough to take our feedback, and give us all 1 more season to research and plan together. - .....

Karri M | 2/22/2017 7:23:26 PM

It would be incredible if students were able to link to the IRS on the FAFSA (like with the DRT) to confirm nonfiling status, like Joseph K mentioned in his comment. I'm not sure if there's a way to do that, but if this verification requirement continues to exist in future years it would be something I'm sure a lot of finaid folks would appreciate. I also agree with the question NASFAA asked in the initial letter to ED about whether it made a difference in a student's EFC if they said they did not file taxes but later said that they did file taxes. Most of our students are not making enough money to even put them above the filing threshold, so I can't imagine that it's making a huge difference. I'm also just going to say that in a general sense, working with the IRS to verify tax data, whether through the DRT or requesting a Transcript online or with the form 4506-T is a clunky and complicated system. I think this requirement and the reactions from financial aid administrators really emphasize not only that the VONF requirement is a burden on students and families, but also that some FAAs, like myself, are not entirely confident that the IRS will actually be able to effectively produce these documents and help our students and families fulfill their verification requirements.

James E | 2/21/2017 1:18:39 PM

The DOE wants us to believe that they and the IRS underestimated the delivierables necessary for Verification students to get "official and acceptable" IRS non filing letters. But, the DOE is itself at fault and could fix this immediately if they so chose. DOE loves to trot out their statistic that "15% of students who said they did not file taxes in fact did," but then leaving out the only important metric -- once those student records are corrected for their IRS income, how much impact did it make in the EFC in the Dependent Student formula? The answer is "infinitesimal." Filer or non filer it makes zero EFC difference in the Dependent Student EFC formula if their earned income was under $7100. Because this is No Big Deal the DOE could issue guidance today that we can just accept non filing information with statements and sources of income, and be done with it. But they will not.

Jesse M | 2/21/2017 12:38:43 PM

Completely agree with you Joseph K. When a non-filer attempts to use DRT on the IRS DRT Screen, upon clicking "Submit" it will tell them "The IRS has found no record of you having filed taxes." This should be something that is easily transferred into the ISIR.

Camille A | 2/21/2017 11:14:55 AM

^Agree with what Joseph K said.

Lorianne W | 2/21/2017 9:33:42 AM

Unbelievable confusion among our applicants. They are submitting the request correctly and receiving responses that aren't currently approved to meet the requirement.

Joseph K | 2/21/2017 9:14:55 AM

"ED states that it has begun working with the IRS to find ways..."
The IRS DRT should be able to return a field code showing they do not have a record of tax filing under that Social Security Number. That code would populate on the ISIR, and we could program to waive tax transcripts based on the code. This doesn't require a series of meetings to figure that out.

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