n-98-59.pdf

Preserve advance releases and the authoritative Internal Revenue Bulletin rendition; directory timestamps are file-publication metadata, not legal effective dates. HTML bulletins begin June 2003; earlier available issues require full PDF parsing.

This collection currently includes the publisher’s available advance-release directory. Historical bulletin renditions are discovered separately; an advance-release record alone does not certify the collection archive complete.

# November 18, 1998

# ADVANCE COPY OF INTERNAL REVENUE BULLETIN ITEM

Attached is an advance copy of Notice 98-59, which informs educational institutions on filing
information returns to report tuition payment.

It will appear in Internal Revenue Bulletin 1998-49, dated December 7, 1998.

You may release this announcement immediately.

Communications
Division

Part III - Administrative, Procedural and Miscellaneous

Returns Relating to Higher Education Tuition and Related Expenses

Notice 98-59

## PURPOSE

This notice modifies Notice 97-73, 1997-2 C.B. 335, and Notice 98-46, 1998-36 I.R.B.
21, by providing that the Internal Revenue Service will not require an
eligible educational institution to file information returns
under $ 6050S of the Internal Revenue Code for 1998 or 1999 with
respect to students who are enrolled during the year only in
courses for which the student receives no academic credit from
the institution. In addition, this notice modifies Notice 97-73
and Notice 98-46 by providing that eligible educational
institutions are not required to file information returns for

<!-- PageBreak -->

1998 or 1999 with respect to nonresident alien students, unless
requested to do so by the student.

BACKGROUND

Section 6050S, enacted by the Taxpayer Relief Act of 1997,
Pub. L. No. 105-34, § 201 (c), 111 Stat. 804, requires the filing
of information returns to assist taxpayers and the Service in
determining the Hope Scholarship credit and the Lifetime Learning
credit that taxpayers may claim pursuant to $ 25A of the Code.
Section 6050S requires that eligible educational institutions
file the specified information returns with the Service and
provide a corresponding statement to the individuals named on the
information return showing the information that has been
reported.

The requirements of $ 6050S are generally described in
Notice 97-73, along with the specific information reporting
requirements for 1998. The Service announced in Notice 98-46
that it is extending the application of Notice 97-73 to
information returns required under $ 6050S for 1999.

Notice 97-73 provides that an eligible educational
institution that receives payments of qualified tuition and
related expenses must file a Form 1098-T, Tuition Payments
Statement, with the Service with respect to the student on whose
behalf the payments were received. Consequently, information
reporting is required even if the student is enrolled during the
year only in courses for which the student receives no academic
credit from the institution, because the payments may be for

<!-- PageBreak -->

qualified tuition and related expenses that are eligible for the
Lifetime Learning credit (although not for the Hope Scholarship
credit) . Further, information reporting is required even if the
student is a nonresident alien for any portion of the year.
DISCUSSION

Treasury may exempt educational institutions from the
reporting requirements of $ 6050S with respect to certain
categories of students, such as non-degree students enrolled in a
course for which the institution grants no academic credit,
provided the exemptions do not undermine the overall compliance
objectives of $ 6050S. See H.R. Conf. Rep. No. 599, 105th Cong.,
2d Sess. at 322 (June 24, 1998). Pending the issuance of
regulations under $ 6050S, and consistent with the limited
information reporting required by Notice 97-73 and Notice 98-46,
the Service will not require eligible educational institutions to
file Forms 1098-T for 1998 or 1999 with respect to students who
are enrolled during the year only in courses for which the
students receive no academic credit from the institution. In
addition, such institutions are not required to file Forms 1098-T
for 1998 or 1999 with respect to nonresident alien students,
unless requested to do so by the student.

The Treasury Department intends to issue regulations on the
information reporting requirements of $ 6050S. The Service will
not impose penalties on an institution if it complies with Notice
97-73, as modified by this notice, for 1998 and 1999.
EFFECT ON OTHER DOCUMENTS

<!-- PageBreak -->

Notice 97-73 and Notice 98-46 are modified.

# DRAFTING INFORMATION

The principal author of this notice is John J. McGreevy of the Office of the Assistant Chief
Counsel (Income Tax and Accounting). For further information regarding this notice contact him
on (202) 622-4910 (not a toll-free call).