Verification Beth Rinderknecht & Pam Ellis

Agenda Overview Verification Tracking Groups Documentation Resources Pointers & Insights Questions

Verification Overview Why is verification required? From the Federal Student Aid Handbook “Because students sometimes make errors on their application, there is a process for verifying applications and making corrections. The Central Processing System (CPS) selects which applications are to be verified, but you also have the authority to verify additional students.” Retrieved from:

Verification Tracking Groups V1—Standard Verification Group Tax filers:Non-filers : adjusted gross income income earned from work U.S. income tax paid household size untaxed portions of IRA distributions number in college untaxed portions of pensions SNAP benefits IRA deductions and payments child support paid tax-exempt interest income education credits household size number in college Supplemental Nutrition Assistance Program (SNAP) benefits child support paid

Verification Tracking Groups V4—Custom Verification Group. Students must verify high school completion status and identity/statement of educational purpose in addition to receipt of SNAP benefits and payment of child support. V5—Aggregate Verification Group. Students must verify high school completion status and identity/statement of educational purpose in addition to the items in the Standard Verification Group.

Verification Tracking Groups V6—Household Resources Group. Students must verify the items in the Standard Verification Group as well as certain other untaxed income on the 2015–2016 FAFSA: payments to tax-deferred pension and retirement savings plans (Questions 45a and 94a); child support received (Questions 45c and 94c); housing, food, and other living allowances paid to members of the military, clergy, and others (Questions 45g and 94g); veterans’ non-education benefits (Questions 45h and 94h); other untaxed income (Questions 45i and 94i); money received or paid on the applicant’s behalf (Question 45j); and resources or benefits not appearing on the FAFSA, such as in-kind support from a relative or a government agency.

Reporting V4 and V5 Reporting results for groups V4 and V5 You must report the verification results of identity and high school completion status for any student for whom you receive an ISIR with tracking flag V4 or V5—as selected by the CPS, not your school—and request verification documentation. You report this information on the FAA Access to CPS Online website: select the Identity Verification Results option from the main menu, enter your school identifiers, the year, and the student identifiers. You will then enter one of the following numeric codes that most applies: 1—verification completed in person, no issues found 2—verification completed using notary, no issues found 3—verification attempted, issues found with identity 4—verification attempted, issues found with HS completion 5—no response from applicant or unable to locate

Reporting V4 / V5 at CPS

Amended Taxes Filers of Amended Returns. Students or parents who file an amended return (IRS Form 1040X) cannot use the IRS DRT, and if they amend the return after using the DRT to fill out the FAFSA, you cannot rely on that data. Instead, you will need to use information from these documents to complete verification: 1.A signed copy of the 1040X form that was filed and 2. an IRS tax return transcript (that will only include information from the original tax return and that does not have to be signed), or any other IRS transcript (such as a return transcript for taxpayer or RTFTP) that includes all the income and tax information required to be verified: AGI, income tax paid, education credits, etc.

Identity Theft Victims of identity theft who cannot get a return transcript or use the DRT submit a Tax Return DataBase View (TRDBV) transcript as well as a statement they have signed and dated indicating that they were victims of tax-related identity theft and that the IRS has been made aware of it. They do this by calling the IRS’s Identity Protection Specialized Unit (IPSU) at After the IPSU authenticates the tax filer’s identity, she can ask the IRS to mail her the TRDBV transcript, which is an alternate paper transcript that will look different than a regular transcript but that is official and can be used for verification. Unless you doubt the TRDBV transcript’s authenticity, you don’t need to get an IRS signature or stamp or any other validation. See DCL GEN for a sample TRDBV transcript. Those who cannot obtain a TRDBV transcript may instead submit another official IRS transcript or equivalent IRS document if it includes all of the income and tax information required to be verified.

High school completion Students must provide one of the following documents that indicate their high school completion status at the beginning of the 2015–2016 year: A copy of a high school diploma; official high school transcript showing the date the diploma was awarded; GED or GED transcript showing the student passed the exam. Certification of a passing score on a state authorized test as the equivalent of a high school diploma; including test similar to the GED, such as the High School Equivalency Test or the Test Assessing Secondary Completion. Test transcripts are acceptable documentation if they indicate that the final score is a passing score or that the student’s state considers the test results to meet its high school equivalency requirements. A copy of the “secondary school leaving certificate” or similar document from the proper government agency for students who completed secondary school in a foreign country. If your college doesn’t have the expertise to evaluate foreign secondary school credentials or chooses not to do so, there are evaluation services available. An academic transcript that indicates the student successfully completed at least a two-year program that is acceptable for full credit toward a bachelor’s degree at any participating school. Students must provide one of the following documents that indicate their high school completion status at the beginning of the 2015–2016 year: A copy of a high school diploma; official high school transcript showing the date the diploma was awarded; GED or GED transcript showing the student passed the exam. Certification of a passing score on a state authorized test as the equivalent of a high school diploma; including test similar to the GED, such as the High School Equivalency Test or the Test Assessing Secondary Completion. Test transcripts are acceptable documentation if they indicate that the final score is a passing score or that the student’s state considers the test results to meet its high school equivalency requirements. A copy of the “secondary school leaving certificate” or similar document from the proper government agency for students who completed secondary school in a foreign country. If your college doesn’t have the expertise to evaluate foreign secondary school credentials or chooses not to do so, there are evaluation services available. An academic transcript that indicates the student successfully completed at least a two-year program that is acceptable for full credit toward a bachelor’s degree at any participating school.

High school completion – Cont. A copy of a secondary school completion credential for homeschool (other than a high school diploma or its recognized equivalent) if state law requires homeschooled students to obtain that credential. A transcript or the equivalent, signed by the parent or guardian of a homeschooled student, that lists the secondary school courses the student completed and documents the successful completion of a secondary school education in a homeschool setting. For a student who has not completed high school and is seeking enrollment in a program that leads to at least an associate degree or its equivalent, documentation from the high school that he excelled academically and from your school that he meets your written policy for admitting such students. This should be a rare occurrence. For students in an “eligible career pathway program,” documentation that they passed an approved ATB test or completed at least 6 credit hours or 225 clock hours that are applicable toward a degree or certificate offered by your school. See the margin note. A copy of a secondary school completion credential for homeschool (other than a high school diploma or its recognized equivalent) if state law requires homeschooled students to obtain that credential. A transcript or the equivalent, signed by the parent or guardian of a homeschooled student, that lists the secondary school courses the student completed and documents the successful completion of a secondary school education in a homeschool setting. For a student who has not completed high school and is seeking enrollment in a program that leads to at least an associate degree or its equivalent, documentation from the high school that he excelled academically and from your school that he meets your written policy for admitting such students. This should be a rare occurrence. For students in an “eligible career pathway program,” documentation that they passed an approved ATB test or completed at least 6 credit hours or 225 clock hours that are applicable toward a degree or certificate offered by your school. See the margin note.

CORRECTING ERRORS For students who are selected for verification and receiving subsidized student aid, changes that result to any non-dollar item and to any dollar item of $25 or more must be submitted for processing.

Potential Change in Verification Tracking Groups Could the Verification Tracking Group ever change as a result of subsequent corrections? Yes. Beginning with FAFSA processing, a student may be moved from a previously assigned Verification Tracking Group of V1, V4, or V6 to Verification Tracking Group V5. Also, if verification was not completed for the originally assigned Verification Tracking Group (V1, V4, or V6) prior to the student being assigned to V5, the student only has to verify the requirements for V5.

Discrepant Tax Data “…financial aid administrators do not need to be tax experts, yet there are some issues that even a layperson with basic tax law information can evaluate…You are obligated to know: (1)whether a person was required to file a tax return (2)what the correct filing status for a person should be (3)that an individual cannot be claimed as an exemption by more than one person.

Pointers / Insights “For example, an FAA who notices that a dependent student’s married parents have each filed as “head of household” (which offers a greater tax deduction than filing as single or married) must question whether that is the correct filing status. Publication 17 explains on pages 23–25 the criteria a person must meet to file as head of household. Resolution of the conflict may be a reasonable explanation of why there appears to be a conflict but is none, or the parents may refile and submit a copy of the amended return.” Retrieved from: FSA HB September 2015, page AVG-125

Pointers / Insights – Cont. Required to File Taxes: From IRS 1040 INSTRUCTIONS - Pages 8-9

Pointers / Insights – Cont. FAFSA Parental Information for unmarried parents of a dependent student must include both of the student’s “legal” parents if the parents live together, regardless of gender of parents (Dear Colleague Letter GEN-13-12) The Defense of Marriage Act – As noted in Dear Colleague Letter GEN-13-25, a student or parent is considered married if the student or parent was legally married in any domestic or foreign jurisdiction that recognizes the relationship as a valid marriage, regardless of gender.

Pointers / Insights – Cont. Common Documentation Errors Failing to review tax documentation for students not selected for verification. Documentation must be reviewed for conflicting information, even if the student is not selected for verification. Failing to obtain tax documents for both parents of a dependent student when both parents are on the FAFSA and file separate tax returns. Failing to obtain tax document of the spouse of an independent student Accepting income documentation from a non-custodial parent. You must determine which parent’s information should be on the FAFSA.

Resource: Tax Transcript Line Items

Other Resources Appendix C (Verification Tracking Groups) Ifap: Federal Register notice published June 25, Dear Colleague Letter (GEN-14-11) published June 30, The ISIR Guide, published October

Questions?