In response to concerns about the impact of the suspension of the IRS Data Retrieval Tool on students and families who have been selected for verification of their FAFSA/ISIR information, Federal Student Aid has announced changes to the verification requirements for the 2016-2017 and 2017-2018 award years. These changes replace prior guidance on acceptable verification documentation including alternative documentation a school may accept and provide new flexibilities for schools. These flexibilities may be used by schools as part of their verification procedures and may be implemented immediately for both award years using 2015 income and tax year information.

IRS Tax Return Filers – In lieu of using the IRS DRT, or obtaining an IRS transcript, institutions may consider a signed paper copy of the 2015 IRS tax return that was used by the tax filer for submission to the IRS as acceptable documentation to verify FAFSA/ISIR tax return information.

Verification of Nonfiling – Institutions are no longer required to collect documentation obtained from the IRS or other tax authorities verifying that the applicant, the applicant’s spouse or the applicant’s parents did not file a 2015 tax return (often referred to as Verification of Nonfiling). However, as currently required, the applicant, the applicant’s spouse or the applicant’s parents, as applicable, must provide to the institution:

– A signed statement certifying that the individual has not filed and is not required to file a 2015 income tax return, and a listing of the sources of any 2015 income earned by the individual from work and the amount of income from each source; and

– A copy of IRS Form W–2, or an equivalent document, for each source of 2015 employment income received by the individual.

Additional Documentation Requirements – Some individuals may be required to submit additional documentation to verify their 2015 income and tax information. That information as well as all other verification requirements can be found:

For the 2016-2017 award year
– June 26, 2015, Federal Register Notice; and
– June 29, 2015, Dear Colleague Letter GEN-15-11

For the 2017-2018 award year
– April 1, 2016, Federal Register Notice; and
– April 5, 2016, Dear Colleague Letter GEN-16-07

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Recently the department provided updated guidance on acceptable documentation for FAFSA information selected for verification in a series of questions and answers posted to the department’s Verification Q&A page. Here’s a summary of the latest guidance.

Q – Must an institution complete verification for students placed in verification groups V4 or V5 who are only eligible for unsubsidized student financial assistance?

A – An institution should verify only high school completion and identity/statement of educational purpose for a student who is only eligible for unsubsidized student financial assistance and who was placed in Verification Tracking Groups V4 or V5. This will help ensure that only eligible students receive aid and will improve the integrity of the Title IV, HEA programs. Institutions need not verify any of the other FAFSA information listed under Verification Tracking Group V5 for such students.

Q – The Department has provided guidance on how to obtain verification of non-filing from the IRS. What do individuals who are subject to foreign tax authorities do?

A – If another tax authority can provide documentation similar to the IRS that indicates the individual did not file taxes for the appropriate tax year, we expect the individual to request such documentation and provide it to the institution. If such documentation does not exist, or if the individual is unable to obtain the documentation, the institution may accept a signed and dated statement from the individual stating either that the tax authority does not provide such documentation or that the individual was unable to obtain the documentation after contacting the tax authority.

Since nontax filers selected for verification are already required to provide a signed and dated statement related to their claim of being a nonfiler, those nontax filers may also include in that statement the attestation specified above.

Q – Must an institution collect documentation of an applicant’s high school completion status for graduate students placed in Verification Tracking Groups V4 or V5?

A – An institution is not required to collect proof of high school status if admission into the graduate program requires the completion of at least two years of undergraduate coursework.