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Legal Memorandum: Instructions for IRS Form 1098-T

Issue: Does a particular seminary need to issue IRS Form 1098-T?

Area of Law: Tax Law
Keywords: Eligible educational institutions; Seminary
Jurisdiction: Federal
Cited Cases: None
Cited Statutes: section 481 of the Higher Education Act of 1965; 20 U.S.C. 1088; section 25A(f)(2) and § 1.25A-2(b); 26 C.F.R. § 1.221-1(e)(4), Ex. 1 (2006)
Date: 02/01/2006

According to the Internal Revenue Service in its instructions for the completion of Form 1098-T, the form must be completed by all eligible educational institutions.  The instructions define an "eligible educational institution" as

any college, university, vocational school, or other postsecondary educational institution described in section 481 of the Higher Education Act of 1965 (20 U.S.C. 1088), as in effect on August 5, 1997.

 

IRS, Instructions for Forms 1098-E and 1098-T, p. ET-2 (2005).

The instructions go on to state that an institution must prepare the form if it is "certified by the U.S. Department of Education as eligible to participate in student aid programs administered by the Department, as described in section 25A(f)(2) and § 1.25A-2(b)."  According to the IRS regulations, it is not important that the institution avail itself of the programs; it is merely sufficient that the school could participate, as in the following example:

University F is a postsecondary educational institution described in section 481 of the Higher Education Act of 1965. The U.S. Department of Education has certified that University F is eligible to participate in federal financial aid programs administered by that Department, although University F chooses not to participate. University F is an eligible educational institution.

26 C.F.R. § 1.221-1(e)(4), Ex. 1 (2006) (emphasis added). 

The question is then whether the seminary is "any college, university, vocational school, or other postsecondary educational institution described in section 481 of the Higher […]

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