Will tuition paid by a relative be considered proof of payment on my behalf?

[unspatiality]

I received a CP2000 saying that the IRS requires proof of tuition paid. My husband received the Lifetime Learning Credit in 2015, and my understanding is that we must prove tuition was paid in order to receive that credit (since the amount listed as billed on his 1098-T is not considered the same as the amount paid).

The problem is that the tuition was paid by his parents. If I send the IRS a bank statement showing proof of payment, it will have someone else's name on it. They did not claim it on their taxes as I do not believe he can be considered a dependent. 

What are my options? Do I have to suck it up and pay the extra tax + interest? Can I submit proof of payment with someone else's name on it? Should I try to track down a payment receipt from the school itself? Please help!

[DoninGA · Accepted solution]

Since the student is not a dependent on someone else's tax return and the qualified education expenses were paid by someone other than the student, the student can claim those education expenses paid on their tax return.

See IRS Publication 970 Tax Benefits for Education, pages 18 and 19 (Example on page 19) - https://www.irs.gov/pub/irs-pdf/p970.pdf#page=18

Expenses paid by others . Someone other than you, your spouse, or your dependent (such as a relative or former spouse) may make a payment directly to an eligible educational institution to pay for an eligible student's qualified education expenses. In this case, the student is treated as receiving the payment from the other person and, in turn, paying the institution. If you claim an exemption on your tax return for the student, you are considered to have paid the expenses.

Since you received a CP2000 Notice from the IRS you will need to call the phone number listed on the notice to find out exactly what is needed by the IRS for the education expenses proof of payment.

See IRS website for a CP2000 Notice - https://www.irs.gov/individuals/understanding-your-cp2000-notice

[TaxGuyBill]

In almost all cases, you just need to get a printout from the college of your 'financial account' to show how much they received during that time period.

Just showing checks to the IRS would not help many people because often Student Loans are used to pay for college (which also count towards the Educational Credits), rather than paying out-of-pocket.  But the printout of your financial account with the college should show everything.