Form 1098-T requirement. To be eligible to claim the American opportunity credit or the lifetime learning credit, the law requires a taxpayer (or a dependent) to have received Form 1098-T, Tuition Statement, from an eligible educational institution, whether domestic or foreign.
However, you may claim a credit if the student doesn't receive Form 1098-T because the student's educational institution isn't required to furnish Form 1098-T to the student under existing rules (for example, if the student is a qualified nonresident alien, has qualified education expenses paid entirely with scholarships, has qualified education expenses paid under a formal billing arrangement, or is enrolled in courses for which no academic credit is awarded). If a student's educational institution isn't required to provide Form 1098-T to the student, you may claim a credit without Form 1098-T if you otherwise qualify, can demonstrate that you (or a dependent) were enrolled at an eligible educational institution, and can substantiate the payment of qualified tuition and related expenses.
I don't think I fully understand the meaning of the phrase "if the educational institution isn't required to furnish Form 1098-T to the student under existing rules". But all the examples refer to conditions where the school is not required to issue a 1098 due to some condition on the part of the student -- such as their visa, their scholarships, or taking non-credit courses. A student enrolled full time and not meeting one of those special conditions should get a 1098 so I believe that if the school elects not to issue 1098s to anyone, then the student can't claim.
Here is the 1098-T instructions:
Specific Instructions for Form 1098-T
File Form 1098-T, Tuition Statement, if you are an eligible educational institution. You must file for each student you enroll and for whom a reportable transaction is made. Also, if you are an insurer, file Form 1098-T for each individual to whom you made reimbursements or refunds of qualified tuition and related expenses.
Exceptions.
You do not have to file Form 1098-T or furnish a statement for:
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Courses for which no academic credit is offered, even if the student is otherwise enrolled in a degree program;
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Nonresident alien students, unless requested by the student;
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Students whose qualified tuition and related expenses are entirely waived or paid entirely with scholarships; and
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Students for whom you do not maintain a separate financial account and whose qualified tuition and related expenses are covered by a formal billing arrangement between an institution and the student’s employer or a governmental entity, such as the Department of Veterans Affairs or the Department of Defense.
This certainly does not seem to apply to this taxpayer, who seems to be a US taxpayer and paid tuition (not waived by scholarships or direct payment agreement with a third party). If the taxpayer here paid tuition but received no academic credit, they may be disqualified for other reasons if I recall. There is certainly no exception in writing for foreign schools.
And in any case, §25(g)(i)(b)(3) includes an absolute requirement for the EIN of the educational institution.
"No American Opportunity Tax Credit shall be allowed under this section unless the taxpayer includes the employer identification number of any institution to which qualified tuition and related expenses were paid with respect to the individual."
https://www.law.cornell.edu/uscode/text/26/25A
§25(g)(8) says "Except as otherwise provided by the Secretary, no credit shall be allowed under this section unless the taxpayer receives a statement furnished under section 6050S(d) which contains all of the information required by paragraph (2) thereof." §6050S is of course, the section of the law requiring the 1098-T statement to be issued.
This was enacted as section 804 of the Trade Preferences Extension Act of 2015 (page 415 of the PDF here
https://www.congress.gov/114/plaws/publ27/PLAW-114publ27.pdf)
See also Q1 here
https://www.irs.gov/credits-deductions/individuals/education-credits-questions-and-answers
