CP2000 says 1099Q amount is "income", which affected other areas of tax return. Will sending my 1099Q and 1098T resolve all issues?

kjgc1991 — Thu, 06 Jun 2019 10:23:13 GMT

Received a CP2000 because my 529 was calculated as income, despite my distribution being lower than my qualified education expenses. I only used my 529 account for tuition and books. The additional "income" the IRS thinks I owe affected other areas on the CP2000, including putting me over the income limit for a $200 retirement tax savings and stating I should have paid $1,588 in tax on a 5329 form. It also stated that I owe back the $2000 lifetime learning credit (I'm in grad school and can't get AOC), even though my education expenses less the $2000 credit are still more than my 529 distribution amount. If I send in my 1099q and my 1098-T, will the $200, $1,588, and $2000 issue be resolved as well?

You must contact the IRS over the phone and make arrangem...

JaimeG — Thu, 06 Jun 2019 10:23:15 GMT

You must contact the IRS over the phone and make arrangements to substantiate that the distribution from your Qualified Tuition Program was used entirely for Qualified Education Expenses.

Form 1098-T is simply what the school reported but if you look at the form, it is possible that only Box 2 has a dollar amount that is described as "Amount Billed", Box 1 states "Payments Received". If possible it would be best to gather:

Tuition Statements/receipts of payment directly from the College or University
All receipts for other Qualified Education Expenses (please view the list below)

Qualified Education Expenses; for purposes of 529 and Coverdell ESA plans

Tuition and fees;
Books, supplies and equipment; Computers and Software
Room and board expenses for students enrolled at least half-time only to the extent they are not more than the greater of

The allowance for room and board included in the cost of attendance for federal financial aid purposes, or
The actual amount charged if the student resides in housing owned or operated by the eligible education institution; and

Expenses for special needs services required by a special needs beneficiary and incurred in connection with enrollment or attendance.

topic CP2000 says 1099Q amount is "income", which affected other areas of tax return. Will sending my 1099Q and 1098T resolve all issues? in Education

CP2000 says 1099Q amount is "income", which affected other areas of tax return. Will sending my 1099Q and 1098T resolve all issues?

You must contact the IRS over the phone and make arrangem...