2014 1042-S Withholding Credit Denial

June 14, 2016

Dear International Students and Scholars:

The IRS has announced that it is taking corrective action for taxpayers whose 1042-S withholding credits were wrongly adjusted or denied as a result of a new matching program it put into place recently.  Please see the announcement at https://www.irs.gov/uac/irs-takes-steps-to-help-students-and-others-outlines-interim-process-for-obtaining-refunds-of-withholding-tax-reported-on-form-1042s-foreign-persons-us-source-income-subject-to-withholding

Please continue to contact the Penn Tax office for any questions at tax@exchange.upenn.edu.  We will keep you informed as any new updates become available.

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Rodolfo R. Altamirano, Ph.D.
Director, International Student and Scholar Services
Office of the Vice Provost for Global Initiatives
University of Pennsylvania
3701 Chestnut St, Suite 1W
Philadelphia, Pennsylvania 19104-3199
(215) 573-6332 (Phone)
(215) 898-2622 (Fax)
Internet: rudiea@pobox.upenn.edu
URL: http://global.upenn.edu/isss
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Victor Adams, CPP
Supervisor, Tax & International Operations
University of Pennsylvania
3451 Walnut Street, RM 308
Philadelphia, PA 19104
Work:    215-898-6291
Fax:     215-746-7630
Email:   tax@exchange.upenn.edu
Effective Leadership Implementing Tax Excellence
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May 27, 2016

Dear International Students and Scholars:

As you are aware, our office has been in close contact with the Penn Tax office to investigate the issue regarding your 2014 Income Tax Return 1042-S information.  This has unfortunately been an nationwide issue that requires a resolution from the Internal Revenue Service (IRS), and Penn has engaged in advocacy through multiple organizations.  This week the Penn Tax office received an update from the National Association of College and University Business Officers (NACUBO) as described below.

**Please continue to contact the Penn Tax office for any questions at tax@exchange.upenn.edu.  We will keep you informed as any new updates become available.**

Sincerely,
Rodolfo R. Altamirano, Ph.D.

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Rodolfo R. Altamirano, Ph.D.
Director, International Student and Scholar Services
Office of the Vice Provost for Global Initiatives
University of Pennsylvania
3701 Chestnut St, Suite 1W
Philadelphia, Pennsylvania 19104-3199
(215) 573-6332 (Phone)
(215) 898-2622 (Fax)
Internet: rudiea@pobox.upenn.edu
URL: http://global.upenn.edu/isss
************************************


May 24, 2016 Memorandum — Update

There has been a recent update from the National Association of College and University Business Officers (NACUBO).  On Friday, May 20, an IRS official contacted NACUBO to provide an update on the problems related to Forms 1042-S and the resulting 2014 tax return problems faced by international students and scholars at U.S. colleges and universities—thousands were denied tax refunds or assessed tax bills.

The official stated that IRS is currently taking steps to release the freezes on the affected accounts and to process the withholding credits (release refunds) for anyone affected.  It is unclear how long this process will take, but the effort is currently underway.

********************************
Victor Adams, CPP
Supervisor, Tax & International Operations
University of Pennsylvania
3451 Walnut Street, RM 308
Philadelphia, PA 19104
Work:    215-898-6291
Fax:     215-746-7630
Email:   tax@exchange.upenn.edu
Effective Leadership Implementing Tax Excellence
********************************

February 29, 2016

Dear International Students and Scholars:

You are receiving this email because you may have received a notice from the Internal Revenue Service (IRS) stating that the 1042-S information that you reported on your 2014 Income Tax Return does not match what Penn reported to them.

Our office has been in close contact and is diligently working with our Penn Tax office to identify ways to investigate and handle this issue. Below, please see the email from Victor Adams, Supervisor of Tax and International Operations. The memo provides information and instructions for you to follow.

Thanks for your patience while we work to resolve this nationwide issue pending guidance from the Internal Revenue Service. In the meantime, please contact Tax and International Operations for your questions. ISSS and the Penn Tax office will continue to closely work together in finding ways to address this issue.

Sincerely,
Rodolfo R. Altamirano, Ph.D.

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Rodolfo R. Altamirano, Ph.D.
Director, International Student and Scholar Services
Office of the Vice Provost for Global Initiatives
University of Pennsylvania
3701 Chestnut St, Suite 1W
Philadelphia, Pennsylvania 19104-3199
(215) 573-6332 (Phone)
(215) 898-2622 (Fax)
Internet: rudiea@pobox.upenn.edu
URL: http://global.upenn.edu/isss
************************************


MEMO

To:      University International Community
From:    Tax & International Operations
Date:    February 29, 2016
Re:      2014 1042-S Withholding Credit Denial

From recent inquiries made to International Student Scholar Services and Penn Tax, we have become aware that the IRS has been denying 1042-S withholding credits on some individual tax returns. Penn has been and will continue to investigate this issue. Here is what we know so far:

There is a discrepancy or a perceived discrepancy between information appearing on the paper 1042-S form and the file submitted to the IRS by Penn.  When these discrepancies are identified by the IRS, denial of credit letters and follow-up notices of adjustment and assessment are being sent to individual taxpayers who claimed a withholding credit on their 1040NR-EZ or 1040NR of federal tax withholding that is reported in Box 7 of Form 1042-S.

The University of Pennsylvania is confident that the 2014 1042-S form you received is correct. We have been in contact with our constituents at the National Association of College and University Business Officers (NACUBO), Thomson Reuters, and PriceWaterhouseCoopers (PwC), who are working with the IRS to investigate the issue.  So far, the IRS has not provided guidance on how to proceed to address this issue.

While we await instruction from the IRS, the University has some guidance for individual taxpayers who received letters from the IRS.

1. Contact the IRS immediately by telephone, using the number provided on the top of your notice, to indicate that you are looking into the issue with the Penn Tax and would like to request that all action on your account be temporarily frozen while a resolution is pending.

2. Penn Tax has provided a written statement for individuals to correspond with the IRS regarding the discrepancy.  Please provide a copy of your 1042-S along with the statement to the IRS.  The statement can be downloaded at
https://global.upenn.edu/uploads/media_items/2014-1042-s-withholding-credit-response.original.pdf

Updates will be provided as new information is received.  If you have any questions or concerns, please feel free to contact Tax and International Operations at tax@exchange.upenn.edu or visit our office.

Thank you

Victor Adams

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Victor Adams, CPP
Supervisor, Tax & International Operations
University of Pennsylvania
3451 Walnut Street, RM 308
Philadelphia, PA 19104
Work:    215-898-6291
Email:   tax@exchange.upenn.edu
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