Posted Date: May 15, 2014
Jeff Baker, Director, Policy Liaison and Implementation, Federal Student Aid
Subject: Resolving Marital Status and Tax Filing Status Inconsistencies
Note: We have corrected this Electronic Announcement to add the paragraph that begins with " We added these comments because ".
This Electronic Announcement advises institutions of actions we encourage them to take when any of comment codes 361 through 368 are included on a student’s ISIR.
As noted in the 2014-2015 Summary of Changes for the Application Processing System Guide posted to IFAP on December 20, 2013, we added new tax return filing status questions to the 2014-2015 Free Application for Federal Student Aid (FAFSA). We also established corresponding ISIR/SAR comments (ISIR comment codes 361 through 368) to alert institutions when the marital status and the tax filing status reported on the FAFSA for the student or parent indicate a possible error. For example, when the reported tax filing status is married (filing jointly or filing separately) and the reported marital status is single, an institution’s review would likely identify an error since the only possible marital statuses for someone who filed a tax return for the prior year as married are married, widowed, divorced, or separated. Single (or never married) would not be a correct marital status for someone whose tax filing status was married.
Of course, there are situations where what looks like an inconsistency between tax filing status and marital status is not an error. Consider a case where the applicant married after the end of the tax year on December 31 but before the FAFSA was completed. This applicant would have correctly reported a tax filing status of single and a marital status of married. This case points out the second reason for these new comment codes. While the two statuses in the example are correct, the applicant may not have included on the FAFSA information from the spouse’s tax return but only information from his or her return. Similarly, an applicant who correctly reported a tax filing status of married and a marital status of divorced, because the divorce was after the end of the tax year on December 31 but before completion of the FAFSA, may have incorrectly reported on the FAFSA income and other information from the joint tax return instead of excluding income and other information of the former spouse.
We added these comments because we believe that these and similar errors could be a fairly common occurrence. While we have determined that including these new comment codes on the ISIR might suggest incorrect information, we do not consider that to be conflicting information subject to the regulatory resolution requirements at 34 CFR 668.16(f). That is why we encourage, but do not require, institutions to review the applicant’s record when any of these comment codes are included on the ISIR to determine if the reported statuses are correct and that the correct income and other information were reported on the FAFSA. Institutions may decide to review applicant records with these comment codes on a case-by-case basis.
If based on these comment codes, an institution chooses to review an ISIR and determines that the reported statuses, income, and other information are correct, it must simply annotate that determination in the student’s file or institutional record. However, if the institution determines that either or both of the FAFSA reported statuses are incorrect or that reported income and other information are incorrect, it must submit any required changes to the Central Processing System (CPS) and maintain supporting documentation.
Note that in instances where an institution determines that the reported tax filing status and marital status are not in error, but a change to income and/or other information is submitted to the CPS, the comment code will still appear on the resultant CPS transaction.
We thank you for sharing in our commitment of maintaining the integrity of the Title IV, HEA financial aid programs by ensuring that only correct information is used when determining applicants’ eligibility.
Institutions that have questions regarding the information in this letter may contact Federal Student Aid’s Research and Customer Care Center (Care Center) staff. Staff is available Monday through Friday between the hours of 9:00 a.m. and 5:00 p.m. (Eastern Time) at 1-800-433-7327. After hours calls will be accepted by an automated voice response system. Callers leaving their names and phone numbers will receive a return call the next business day. Alternatively, you may e-mail the Care Center at firstname.lastname@example.org.