<p>I heard from a friend who claims she was able to hide income off her S's FAFSA last year....
She said it was an honest mistake and then decided not to correct it-- and she didn't get caught...</p>
<p>While I understand that colleges request a signed copy of the 1040 tax forms-- and you sign off on the college's and FAFSA forms that you are being honest....in fact I have heard people "lie".</p>
<p>So my specific question is whether the FAFSA is verified by matching up SS #s through the IRS and would FAFSA contact you if there is a discrepancy?
What if you omitted a 1099 from the FAFSA and didn't catch in until later in April after the FAFSA was filed and you also filed your 1040. You ammend your 1040 - but if you don't ammend your FAFSA-- will you be contacted by them if records are out of line with IRS records?</p>
<p>Do I presume too much from the federal government...???
averagemama101 is online now</p>
<p>It’s easy to make mistakes on financial forms. And sometimes it’s simpler to leave a small error rather than introduce confusion into the system by trying to correct the small error. And you usually need to take into account that some people exaggerate a bit.</p>
<p>That said, if it’s a big error then you’re probably better off correcting it. That old excuse “Oh I must have left a zero off … yes my income is $390,000 not $39,000” just doesn’t cut it.</p>
<p>It’s not “FAFSA” that would contact you with questions, it’s individual colleges who might do so. FAFSA is just the form. Colleges make use of the information contained therein.</p>
<p>I think you’ve given this scenario a bit too much (or maybe too little) thought. I never give the government much credit for being smart. That said, the LAST thing I would be messing with on a federal form is income. </p>
<p>Amended tax returns get a LOT more scrutiny. If I were the government, I’d check amended returns with (now) higher income to report that are taking a credit for kids in college. I’d match the amended to FAFSA and come knocking. Also, keep in mind that you need to file a FAFSA for every year your kid is in college. Big spike in income one year to the next would be a red flag for those monitoring the process. </p>
<p>Ultimately, it not that much different from cheating on your taxes. Basically you need to ask yourself the Clint Eastwood line … “do you feel lucky?” I personally will sleep much better at night not messing with something that would affect both my wife AND my child.</p>
<p>I think there is “spot check” verification. In other words, I think they verification on a certain percentage of the total. If they find high numbers of errors, they will be in jeopardy of losing any federal funds they receive. It is in the interest of the school to make sure this doesn’t happen. However, I doubt that schools check every FAFSA for accuracy.</p>
<p>If there is a discrepancy discovered, you would be asked to verify. A certain number of FAFSA’s are marked for a verification process. If you are filling out a FAFSA, you may also be filling out a PROFILE and perhaps some other school specific forms. Better to be accurate or else you would have to “lie” again and again which increases the chance of getting caught. Not a good idea.</p>
<p>Guys-- I’m sorry- -you’re all missing the point.</p>
<p>Random FAFSA verification occurs-- and you’re asked by the school to submit the 1040 and copies of W2s</p>
<p>What this friend had occur was unique perhaps-- but her husband had a huge contract – he had a 1099 for $22,000… and by including all the other 1099s and W2…he was able to file taxes, file the FAFSA and simply exclude one of the 1099s-- $22,000 is alot of income and it can make a substantial dent to an EFC…as much as $4000-5000 on an EFC</p>
<p>So my question is whether the FAFSA is independently verified by matching up SS # and seeing if what is on the FAFSA coincides with the tax return filed at the IRS. They ammended their taxes once the 1099 arrived late (at first they simply forgot about it)…but never bothered to update their FAFSA. </p>
<p>Seems to me-- if you have more than one job 0r you are a family where one or more parents receives 1099s - just having submitted a 1040 with some of these would potentially be a dishonest yet easy to accomplish way to hide income?</p>
<p>It’s random verification only. There isn’t a system which independently verifies every FAFSA by matching up social and taxes. It is an “easy” way to hide income until you get selected for verification. Then you have a problem. Not to mention it is illegal/dishonest. Your friend should have gone back and amended the FAFSA when the late 1099 arrived.</p>
<p>It’s not potentially dishonest - it IS dishonest. Sure, you might get away with it, but my personal integrity is worth more than the additional aid for which my student might qualify.</p>
<p>It certainly ****ed me off…as we struggle to send one to college and get ready to send # 2 out the door. But it’s all part of the EFC model being terribly misguided-- does anyone honestly believe their EFC is something their family can accomplish?<br>
Our EFC for child # 1 was Three times our annual mortgage payment-- a shocker to us…did we ever get used to it (she’s now a senior)…certainly not-- but we haven’t saved a dime for our pending retirement in three years…</p>
<p>That said, there’s lots of people working off the books too- and their EFC is based solely on 1040 income. </p>
<p>So while I personally would not cheat-- it would appear that anyone could submit a FAFSA and copies of 1040s with a (bogus) tax return which in theory could be omit some 1040s or 1099s if multiple jobs are held.</p>
<p>But keep in mind- when the EFC for those of us in the “middle class” comes in at 25-30% of our gross income – that’s simply mind boggling. Anyone with a family income of 120,000- 160,000-- the EFC model is that percentage of gross income- that is higher than the actual federal tax rate! So any possibility of shielding income is certainly tempting…
Sure that is a VERY high income level-- but if you calculate that potentially 35k - 50k could be sucked out off the top on a college education - you really have to wonder where have things gone wrong…</p>
<p>They are supposedly testing a new system where data comes direct from the IRS. If it works out then that may be how it works for 2010-2011 FAFSA. Personally I’d rather it does not change until after we are done with FAFSA as I am sure there will be teething problems. It would take care of some of the liars and cheats ot there I guess.</p>
<p>Is it possible to get away with lying on FAFSA? Yes I am sure it is. Is it wise to lie on federal application? No it is not. Penalties for lying on FAFSA include fines, imprisonment, having to repay all aid that has been paid.</p>
<p>averagemama101, when you say “potentially 35k - 50k could be sucked out off the top on a college education” you’re talking about an expensive school. I’m not saying college isn’t expensive, but at that level it’s a choice. Being able to send a student away to a private residential college is a luxury. I believe the government is doing right by providing poor and modest-income students a hand up to attend local community colleges or even 4-yr public universities, especially ones to which they are able to commute. In fact I wish there was more money available for this.</p>
<p>Beyond that, I don’t really think funding for people who earn in the top percentiles of familes nationally really need subsidy to send their children to private residential colleges. If cheating feels like a good option to your friends, good luck to 'em.</p>
<p>A lot of thing about the college application process are not checked except through random verification. Service hours, what kids put down for their ECs, etc.–lots of places to fudge and lie.</p>
<p>I wouldn’t have respect for a person who wouldn’t correct their FAFSA for a $22K underreporting.</p>
<p>I wonder how it works for Canadians who do not file US taxes (at schools that offer financial aid to Canadians). While they may accept the equivalent tax forms from Canada…I wonder if they realize that some Canadians earn income overseas that is not reported (big issue where we live). </p>
<p>I came to wonder about some friends whose kid has full financial support from a particular Ivy college (or so they boast, calling it a scholarship at a school that doesn’t offer scholarships). Yet this family is extremely well off (sending four boys to private school, belonging to the country club, whose house is worth $2mil at least). Dad works in HK however…he doesn’t pay Canadian tax on that income. We know about how it works, Canadian tax law and satellite families, but how would they? It just made me go hmmm.</p>
<p>I agree in principle. But in practice there are inequalities even among relatively well-off families, which ought to be addressed. </p>
<p>Some middle income families put away substantial savings for college. Their EFC may exceed the total cost of attendance at even the most expensive schools. So, no need-based aid. Yet other families at the same income level (say, $100K-$150K) who have not saved a penny qualify for at least modest aid at some schools. So there are disincentives to save, as well as incentives for dishonest people not to fully disclose income and assets.</p>
<p>I hope all top private schools will aim, over the years, for the financial aid system now in place at Harvard and a few other tip-top schools, which significantly discount costs to all families earning below a certain rather high threshold ($100K or more). It’s not that people are “entitled” to this help, it’s that this is the best way for the school to ensure that the most qualified applicants are able to attend. Though I suppose some families just above the threshold will resent this system, too.</p>
<p>swimcatsmom, Is this what you’re referring to? I looked at that; missed the “data coming directly from the IRS.” Maybe I read it too fast? (The link is on this thread.) Or maybe you were referring to other documents?</p>
<p>tk21769, I have no problem with whatever Harvard or any other well-endowed school wants to do with its own money. But that isn’t what the OP’s question pertains to. She was asking about how one might cheat on FAFSA in order to get a lower EFC. FAFSA is not about private money, but about money granted and/or loaned by the government.</p>
<p>Harvard and similar schools require the Profile, which when processed schools according to their individual FA policies can determine whether there is need or not – but only by the standards of the school processing it.</p>
<p>I do not think the government should be granting aid sufficient to help the children of upper income families attend expensive private residential colleges.</p>
<p>There are certainly inequalities, but the most pronounced ones affect the poor far more than those earning in the highest percentiles.</p>