1098t How to Report Correctly?

[Ann18]

I received a 1098-T form that has nothing for box 1/expenses and an amount for box 5/scholarships. The school told me those expenses were claimed on my 2018 1098t form. All of the scholarships for 2019 were used for my tuition expenses that were claimed in "2018" according to the school and did pay a small amount for tuition. I know there's an option that says: Did student's aid include amounts not awarded for 2019 expenses? The thing is I'm not sure if I should put that info or put what's claimed exactly on the 2019 1098t since I received the american opportunity credit in 2018. The 2018 1098-T had a bigger number for box 1 compared to box 5. I'm assuming it had 2017 expenses as well but I claimed it as is. Since the 2018 1098-T form was claimed exactly as shown, would I input the 2019 1098-T as is or not?

[RedHerring]

We used Turbo Tax on our 2016 returns and filed taxes before the 1098-T forms were issued by our 2 sons college. Long story short, our education tax credits were disallowed. The IRS demands a return of education tax credit plus penalties of $8,000.00 approx.

Is there any regulations of this controversial 1098-T that was originated in 2016 that could help in our negotiations with the IRS?

Please advise.

Red Herring

[Critter-3]

@RedHerring 

2016?  And this is the first time you got an IRS notice on the disallowed credit ?  

If the 1098-T supports the amounts you reported on the education credit you can respond back with the correct information to refute the disallowance. Seek local professional guidance in this matter if you did not purchase the audit protection package. 

[Hal_Al]

What, exactly, does the IRS letter say.  Prior to 2018, the form 1098-T had a box 2, for amounts billed by the school. Box 1 was for amounts actually received by the school.  Many schools just left box 1 blank.  The IRS began "cracking down" on this situation, forcing taxpayers to prove they paid tuition.   

We've seen many of these, in this forum.  Usually, it's only necessary to show the IRS you paid qualified expenses.  The school's billing statements, showing your payments credited to the student's account may be all you need.  Cancelled checks, bank and credit card statements  may provide additional proof.