IRS Data Retrieval Tool and Inaccurate $1 Adjusted Gross Income

On March 5th, 2021 Federal Student Aid released an Electronic Announcement regarding instances where applicants completing the 2021-2022 FAFSA, used the IRS Data Retrieval Tool and their AGI is inaccurately displaying as $1.  Guidance has been provided by both FSA and NASFAA on how a school should review and resolve these discrepancies if found during review.  FSA has also indicated, a school is not required to actively identify applications that meet this condition at this time.

Based on the information provided from FSA and NASFAA, it is our interpretation that the school would do the following if the school becomes aware that this condition exists for a student or a parent.

Tax Filers - Tax filers who incorrectly followed the process for Non-tax filers and used the Non-Filers: Enter Payment Info Here Tool, the school may accept a signed copy of the tax filer's Federal Tax Return and all applicable schedules to correct the FAFSA.  Please note: the information transferred from the IRS DRT and a Tax Transcript will only reflect the AGI of $1. A school may request the appropriate 2019 Signed Federal IRS Form 1040 through the Request Information button in StudentForms.

Non-tax filers who used the Non-Filers: Enter Payment Info Here Tool - Non-tax filers who are unable to obtain a Verification of Nonfiling letter from the IRS may call 1-800-829-1040 to request IRS Letter 3538. If unable to obtain the VNF letter or IRS Letter 3538 in a timely manner a school may accept a signed statement of nonfiling that certifies they attempted and were unable to obtain the documentation from the IRS. The IRS Letter 3538 may be uploaded into the IRS Verification of Nonfiling Letter upload step within StudentForms. If a school has the setting enabled to Allow Statement of Nonfiling in StudentForms, the student will have the option to provide the signed statement of nonfiling if they have attempted and are unable to obtain either the VNF or IRS Letter 3538.

Non-tax filers who filed a tax return only to claim the stimulus check - Non-tax filers who filed a tax return instead of using the Non-Filers: Enter Payment Info Here Tool. These Non-filers are required to provide a signed copy of the tax return and any other documentation (W-2s, etc.) reported on the FAFSA. A school may request the appropriate 2019 Signed Federal IRS Form 1040 through the Request Information button in StudentForms.

After reviewing the current guidance CampusLogic does not have plans to alter any functionality within StudentForms. When or if additional information becomes available we will evaluate it and see if adjustments are needed. 

This communication is not meant as regulatory guidance or advice to a school. It is the responsibility of the institution to ensure that the implementation, configuration, updates to, and utilization of the tool set purchased from CampusLogic are meeting Federal and State regulatory requirements/sub regulatory guidance, institutional polices, and accrediting body standards and requirements.

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Update 10/01/2021 - An Electronic Announcement was posted on 09/30/2021 indicating that schools may continue to see an AGI of $1 on the 2022-2023 ISIR.  The full text of the EA may be viewed here. For 2022-2023 schools are encouraged to identify ISIRs where the AGI is $1 and to resolve with the student as needed. 

"Potential Impact to Student Aid Eligibility for 2022–23 FAFSA cycle

FAFSA filers who use the NFP, prior to filing a 2020 tax return, and then use the IRS DRT to transfer their tax information into the 2022–23 FAFSA will have an incorrect AGI of $1. This may result in a lower EFC and a higher Pell Grant award for students who would not otherwise be eligible. 

As a result of this issue, Financial Aid Administrators are encouraged to identify all instances of $1 AGIs, for the 2022–23 FAFSA cycle, and follow-up with applicants to resolve as appropriate. Schools should instruct the student and/or parent to obtain a Record of Account from the IRS to verify if the $1 value is correct and make adjustments to the student’s financial aid package as needed."

Schools may continue to use the previous workaround provided to request documentation through StudentForms. If requesting tax documentation, 2020 tax documentation would be requested.