AOTC audit

[jobyboy]

I am being audited for 2018 AOTC and I didn't keep any receipts for educational expenses other than tuition.

Questions:

1. Is there a certain amount of $ (excluding tuition) IRS would or should accept as reasonable educational expense? (books, computers, etc.)

2. Is college parking fee a qualified educational expense?

[ErnieS0]

No, there is no standard amount for other education expenses such as books and computers when claiming the American Opportunity Tax Credit.

Do you have any other proofs of purchase, such as credit card receipts or a class syllabus showing required textbooks? You can also check your college bookstore. They will be able to print a receipt or account statement.

The IRS doesn’t have to accept any deductions without a receipt, but they may allow expenses if you can convince them that you bought those items and can provide a good estimate of how much you paid.

Parking is not a qualified educational expense. Qualified expenses are tuition, required enrollment fees, and course materials that the student needs for a course of study whether or not the materials are bought at the educational institution as a condition of enrollment or attendance.

[jobyboy]

So, If I cannot prove the educational expenses but can prove the tuition payments plus 1098T, IRS should honor that and count tuition toward AOTC credit? In other words, they won't take away the entire AOTC out?

[FangxiaL]

In the list of the document requests, see what the revenue agent is asking. Whenever you claim a credit or take a deduction, make sure you can substantiate that. For the AOTC, 1098-T is important, you should be able to come up with some bank statements or credit statements to back up the payments made. 

Whether the IRS takes away the entire credit or not depends on how much you can substantiate. 

@jobyboy