How Do We Complete Verification When No 1040-X Was Filed But the IRS Corrected the Tax Return?

Award Year: 2024-25 KA-36870 Helpfulness Rating 803 page views

This guidance is specific to the 2024-25 award year and later. For 2023-24* award year guidance see AskRegs Q&A, How Do We Complete Verification Or Resolve the 07 When No 1040-X Was Filed But the IRS Corrected the Tax Return?

Sometimes, the IRS will make minor internal corrections (e.g., math errors) while processing the tax return without requiring the individual to file a 1040-X amended tax return. The tax filer receives a notice from the IRS listing the corrections. These corrections are still considered amended tax data. Starting with the 2024-25 award year, the corrected/amended data will be transferred into the FAFSA using the FUTURE Act Direct Data Exchange (FA-DDX), or it will be manually entered by the FAFSA contributor if the FA-DDX cannot be used. There will be no IRS Request Flag or amended tax return indicator on the FAFSA, in the FA-DDX, or on the Institutional Student Information Record (ISIR). There will also not be any postscreening to pick up amended tax data processed after the FA-DDX was used. Therefore, unless you somehow find out on an ad hoc basis that their tax data were corrected/amended after the FAFSA was filed, there should be no need to verify these individuals as amended tax filers. You would still need to verify them under the documentation requirements for non-amended tax filers in the September 19, 2023 Federal Register.

If, for some reason, you find conflicting information and need to verify the individual using amended tax data, you follow the documentation requirements below. You may not be aware that the tax filer did not file a 1040-X until you attempt to collect one and are notified by the filer that an adjustment was made by the IRS. The individual does not need to file an amended tax return and will not have a 1040-X. In these instances, the school needs a combination of documents to complete verification.

You need either one of the following:

In addition to one of the above documents, you also need either one of the following items:

Alternatives In Any Case: The Tax Account Transcript can be used in conjunction with a Tax Return Transcript or signed copy of the tax return (with applicable schedules) to complete verification without any of the other items listed above. An IRS Record of Account Transcript can be used by itself (without any of the other items listed above) to complete verification of the income data; however, the IRS Record of Account Transcript may be more difficult to interpret and may require the assistance of the IRS or a tax expert.

The school does not need to collect any further proof that the individual either did not file a 1040-X or is not required to file a 1040-X.

More Information: Reference the Federal Register and ED's Verification Program Integrity Q&A DOC-Q2/A2. Also see AskRegs Knowledgebase Q&As, Does the FA-DDX Include Amended Tax Return Data?, and, What Documentation Is Required To Complete Verification When an Individual Files an Amended Tax Return?

AskRegs Q&As represent NASFAA's understanding of regulatory and compliance issues. They are FOR INTERNAL USE ONLY. While NASFAA believes AskRegs Q&As are accurate and factual, they have not been reviewed or approved by the U.S. Department of Education (ED). If you should need written confirmation of AskRegs information for audit or program review purposes, please contact your ED School Participation Division. NASFAA shall not be liable for technical or editorial errors or omissions contained herein; nor for incidental or consequential damages resulting from the furnishing, performance, or use of this material.