From:	Martinez, Robert
Sent:	Thursday, March 19, 2009 11:15 AM
To:	'kowens@midwestern.edu'
Cc:	Mullan, Kate; Utz, Jon
Subject:	RE: Public Comment about IRS burden

Dear Ms. Owens:

Thank you for your comments on the William D. Ford Federal Direct Loan Program (Direct Loan Program) Income Contingent Repayment (ICR) and Income-Based Repayment (IBR) Plan Consent to Disclosure for Tax Information form.  
 
You expressed concerns about requiring borrowers to provide consent to release of tax return information by the Internal Revenue Service (IRS) if they wish to repay their loans under the new IBR Plan.  Please note that this consent is required by the federal regulations that govern the Direct Loan Program.  Specifically, 34 C.F.R. 685.209(c)(7) requires a borrower who wishes to repay his or her loans under the ICR Plan to provide the U.S. Department of Education (the Department) with written consent to the disclosure of certain tax return information by the IRS, and final regulations that were published on October 23, 2008 (73 FR 63258) established the same consent requirement for borrowers who choose the new IBR Plan that will be available effective July 1, 2009.  These regulations were developed through a process of negotiated rulemaking that provided for public comment.  For borrowers who choose to repay their loans under the ICR Plan, the consent requirement has been in place since the Direct Loan Program was established.
 
The use of tax return information obtained directly from the IRS ensures that the Department has the most accurate information available to calculate a borrower’s required monthly payment amount under the ICR Plan or the IBR Plan.  Further, the consent requirement reduces burden for borrowers, since the IRS – not the borrower – provides the required income information directly to the Department through an electronic process.  The information provided by the IRS is used solely for the purpose of determining a borrower’s ICR or IBR payment amount. 
 
A borrower may withdraw his or her consent to the release of tax return information by the IRS at any time in accordance with procedures that are explained on the consent form.  However, a borrower who withdraws consent must then select a repayment plan other than ICR or IBR.  
 
The Department has no reason to believe that borrowers may be subjected to audits or other actions by the IRS simply because they complete a Consent to Disclosure of Tax Information form for purposes of the ICR Plan or IBR Plan.  Please contact the IRS if you continue to have concerns about this issue.  
 
I hope that you find this information helpful.

Sincerely,

Robert Martinez
Direct Loan Division
U.S. Department of Education    

-----Original Message-----
From: Owens, Karen [mailto:kowens@midwestern.edu]
Sent: Wednesday, March 11, 2009 11:42 AM
To: IC DocketMgr
Subject: Public Comment about IRS burden

The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the 
quality, utility, and clarity of the information to be[[Page 10559]]collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology.

To Whom It May Concern:
     I would be very concerned about the IRS’ involvement in this entire process, and how it would create an undue burden for not only us, the Financial Aid Advisors, but the IRS and the students or graduates. First, a signed IRS tax document is an official document and most people keep their own copy when they submit their taxes. We certainly can tell people that a “random” number of IBR applicants will be checked ‘at will’ based on the information they’ve given to the department, and if at any time an IRS tax return has been improperly replicated, it could be jail or some punishment. So the borrowers know at any given time this could be the case that the IRS is involved, and by all means the borrowers should be willing to sign an agreement allowing this to happen. But to say that every single applicant must have a tax return directly from the IRS impugnes the integrity of all the students who apply and the program as a whole – the insinuation is that you cannot be trusted, and we have to go directly to the IRS to get the truth. It just doesn’t sit well with me, so I wanted to share my two cents’ worth about it.

There could be a way to minimize this burden without going through the IRS, because another fear is when people hear the word “IRS” it sends chills down their spine. I believe the borrowers as a whole would wonder, will I have a bigger chance of getting audited now that the IRS has to send them my tax return? Does it put up a red flag for me? I don’t want anybody getting anything from the IRS when I can give it to them myself; it could cause a good number of borrowers who otherwise would utilize this program to back off simply because it involves the IRS, and they do not want that connection. Why couldn’t we get something else to try to validate the tax information, such as the “entire” tax form including the W2s? We could compare with that, and then if the borrower also signed an agreement that their information is true and accurate with fear of prosecution, that seems a better route to take than involving the IRS with a general public who often is afraid of them anyway. Many, many students and especially parents mention the IRS when doing their FAFSAs, asking, “Is the IRS going to get this?” Maybe that goes directly to the honesty on their individual tax forms, but that’s not what we’re checking anyway; we are checking to make sure the tax form we have matches what the IRS has, right? If that’s the case, I believe we can make it easier by getting other documents and not making borrowers and applicants have to endure the fear of the IRS, undue waiting time from the IRS, and the implication that they’re not telling the truth.

Thank you for reading my comments!!

Sincerely,
Karen Owens, MBA
Assistant Director, Student Financial Services 
Ph:  (623) 572-3228 
Fax: (623) 572-3283