After months of waiting for their tax refunds, international students may finally be able to breathe a sigh of relief. The National Association of College and University Business Officers (NACUBO) reported that the IRS is working to resolve the 1042NR notices sent to international students.
Colleges and universities are required to report payments that they made to international students that exceed tuition and other qualified expenses and income tax withholding on Form 1042S. The students then use this form to report the payment on their personal tax return. It appears that a glitch occurred during electronic transmission of Forms 1042S, which caused data mismatch and the outpouring of notices.
After following the issue for several months, NACUBO recently heard from colleges and universities that several students received notification from the IRS regarding resolution of their 2014 tax account. This announcement is highly welcomed by students and institutions, since the IRS has not provided much guidance for those affected up to this point. The IRS has also suggested that it will take steps to prevent this issue from occurring during the processing of 2015 Form 1042 returns.
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