SECTION 2. BACKGROUND

In general, section 6050S requires any eligible educational institution (as defined in section 25A(f)(2)) to file information returns and to furnish information statements to assist students and the Service in determining the amount of qualified tuition

and related expenses (qualified expenses) for which an education tax credit is allowable under section 25A (as well as other tax benefits for higher education expenses). For calendar years beginning after December 31, 2003, an eligible educational institution must elect to report either the aggregate amount of payments received, or the aggregate amount billed, for qualified expenses during the calendar year for students enrolled for any academic period. Section 1.6050S–1(b)(1) of the regulations provides that once an eligible educational institution elects to report either amounts billed, or payments received, it must continue to use the same method of reporting for all subsequent calendar years for which it is required to file information returns, and furnish information statements, unless permission is granted to change its reporting method.

Section 25A(f)(2) of the Code defines an “eligible educational institution” to mean an institution: (1) that is described in 20 U.S.C. 1088 of the Higher Education Act of 1965 (Education Act) as in effect on the date of enactment of section 25A (August 5, 1997); and (2) that is eligible to participate in federal financial aid programs described in Title IV of the Education Act. As of August 5, 1997, 20 U.S.C. 1088(a)(1) generally defined an “institution of higher education” as: (1) an accredited postsecondary educational institution (as defined in 20 U.S.C. 1141(a) (a public or nonprofit institution of higher education)); (2) a proprietary institution of higher education; and (3) a postsecondary vocational institution.

To establish eligibility to participate in financial aid programs under the Education Act, an institution generally must apply to the Secretary of Education for a determination that it qualifies as an eligible institution, and may request a certification that it is eligible to participate in financial aid programs under Title IV. See 34 C.F.R. 600.20(a). If the Secretary of Education determines that the entire applicant institution, including all its locations and all its educational programs, satisfies the applicable requirements, then the eligibility determination extends to all educational programs and locations identified on the institution’s application. See 34 C.F.R. 600.10(b)(1). If, however, only certain educational programs or locations satisfy the applicable requirements, then the eligibil

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cations and branch campuses, has changed its method of reporting within the four year period preceding the year of the change, and if so: (a) the calendar year of the previous change, and (b) an explanation of extraordinary circumstances.

The written statement must be signed by an officer of the eligible educational institution authorized to sign tax returns. The written request must be signed under penalties of perjury that, to the best of the person’s knowledge and belief, the information contained in the statement is true, correct, and complete.