Even if you enter the IRS forms and go thru the whole process, when the box 1 amount on form 1099-Q is fully covered by expenses, TurboTax will enter nothing about the 1099-Q, or expenses, on the actual IRS tax forms.
Several users (including me), in the past, have reported receiving a CP2000 letter, from the IRS, on 529 distributions. They replied that their child was in college and the distributions were for qualified expenses, which they listed, but they did not provide receipts.. They later received notices saying they were in the clear. In my case, I sent copies of the school's billing statements. I have not seen anybody reporting such notices more recently. I think the IRS is now more aware of the matching problem and that most 529 distributions are qualified.
