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In 2002, colleges were supposed to report amount paid for qualified education expenses. They whined that their computer systems weren't up to it so were given the option of reporting amount billed. Every time the deadline has come to eliminate the amt billed box, they whined some more that they still weren't ready. It takes supposedly the brightest among us who inhabit our institutions of higher learning FIFTEEN years to figure it out, and they had 15 years warning. Guess they knew this was an easy pass and didn't bother, or else they really don't belong in a place that teaches our young. I understand that colleges use academic years, bill for calendar year semesters, and receive parent/student/financial aid payments at different times. Sounds like an easy coding solution to me. So we beleaguered tax pros will have to spent yet another year combing through unintelligible bursar statements while the brilliant IT staffs spend their time inventing with more ways to use the student ID cards for off-campus pizza and stadium seating lotteries.

One of the things I have noticed over the years is that we as tax preparers are now required to enter data into a tax return that we were never officially trained to be experts on - health insurance, EICs, investigative fact checkers, dependent Social Security numbers, divorce issues, lifestyle changes, engagement letters, etc etc that all create a larger liability for reporting than we ever bargained for - and we become the first victims IRS and tax authorities look to should a return have an issue. And we have to rely on the reliability of third party information. Until we can control our clients' honesty and reliability of data we're given, these problems are never going to stop.

I agree with cbslee that there isn't harm in filing and is the safe route if you are unsure. Your client did receive both a 1099 and a W-2, and this would put the IRS on notice in case both are still in the system, and that would lead to the trail of IRS requiring this company to reclassify your client as an employee.

I don't know much about botnets, bandwidth, VPN, plugins, and the like. But I do know Eric is probably spending money and definitely spending his time keeping our forum as safe as possible. So I decided this is a good time to hit the DONATE button (which I just did), as a way to say "Thank You, Eric".

Seems as though they are using the S-corp in an attempt to bypass socsec/med tax because the net income of the S-corp is not subject to SE taxes, However, if the owner is not receiving a salary from the S-corp which would approximate reasonable compensation for someone of his/her level of expertise, then this is potentially a big problem. You might want to have that conversation with the client and make sure they are committed to paying themselves reasonable compensation going forward. If not, then it would be wise to pass on the relationship. Whether they do anything about prior-years' returns is an open question, but you definitely should not get on board with continuing this practice (if my assumption is correct that this is what is happening).

I just heard, at an update seminar, that the date has been extended till Jan. 1, 2019, on the mandate for colleges to fill in box 1 of the 1098-T for all college students. So, for tax year 2017, we still have to play the billing statement game. Just like the usual IRS. Make a deadline (or so called), then extend it because of pressure from the people involved.