[Congressional Record Volume 147, Number 166 (Tuesday, December 4, 2001)]
[House]
[Pages H8801-H8803]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
AMENDING INTERNAL REVENUE CODE TO SIMPLIFY REPORTING REQUIREMENTS
Mr. HULSHOF. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 3346) to amend the Internal Revenue Code of 1986 to simplify
the reporting requirements relating to higher education tuition and
related expenses.
The Clerk read as follows:
H.R. 3346
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SIMPLIFICATION OF REPORTING REQUIREMENTS RELATING
TO HIGHER EDUCATION TUITION AND RELATED
EXPENSES.
(a) Amendment Relating to Persons Required To Make
Return.--Paragraph (1) of section 6050S(a) of the Internal
Revenue Code of 1986 (relating to returns relating to higher
education tuition and related expenses) is amended to read as
follows:
``(1) which is an eligible educational institution which
enrolls any individual for any academic period;''.
(b) Amendments Relating to Form and Manner of Returns.--
Subsection (b) of section 6050S of such Code is amended as
follows:
(1) Paragraph (1) is amended by inserting ``and'' after the
comma at the end.
(2) Subparagraph (A) of paragraph (2) is amended to read as
follows:
``(A) the name, address, and TIN of any individual--
``(i) who is or has been enrolled at the institution and
with respect to whom transactions described in subparagraph
(B) are made during the calendar year, or
``(ii) with respect to whom payments described in
subsection (a)(2) or (a)(3) were made or received,''.
(3) Paragraph (2) of section 6050S(b) of such Code is
amended by striking subparagraph (B) and redesignating
subparagraphs (C) and (D) as subparagraphs (B) and (C),
respectively.
(4) Subparagraph (B) of section 6050S(b)(2) of such Code,
as redesignated by paragraph (3), is amended to read as
follows:
``(B) the--
``(i) aggregate amount of payments received or the
aggregate amount billed for qualified tuition and related
expenses with respect to the individual described in
subparagraph (A) during the calendar year,
``(ii) aggregate amount of grants received by such
individual for payment of costs of attendance that are
administered and processed by the institution during such
calendar year,
``(iii) amount of any adjustments to the aggregate amounts
reported by the institution pursuant to clause (i) or (ii)
with respect to such individual for a prior calendar year,
``(iv) aggregate amount of reimbursements or refunds (or
similar amounts) paid to such individual during the calendar
year by a person engaged in a trade or business described in
subsection (a)(2), and
``(v) aggregate amount of interest received for the
calendar year from such individual, and''.
(c) Conforming Amendments.--Subsection (d) of section 6050S
of such Code is amended--
(1) by striking ``or (B)'', and
(2) in paragraph (2), by striking ``subparagraph (C)'' and
inserting ``subparagraph (B)''.
(d) Effective Date.--The amendments made by this section
shall apply to expenses paid or assessed after December 31,
2002 (in taxable years ending after such date), for education
furnished in academic periods beginning after such date.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Missouri (Mr. Hulshof) and the gentleman from Maryland (Mr. Cardin)
each will control 20 minutes.
The Chair recognizes the gentleman from Missouri (Mr. Hulshof).
General Leave
Mr. HULSHOF. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks and include extraneous material on H.R. 3346.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Missouri?
There was no objection.
Mr. HULSHOF. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, education is the great equalizer, and getting a college
education remains a part of the American dream. Yet affording that
education at an institution of higher learning can be a nightmare for a
prospective student or that student's family.
According to a 1997 GAO report, since the early 1980s college tuition
has increased by 234 percent, which of course far outpaces the cost of
living or any rise in family income. Some students balance their class
work with part-time jobs, others rely on financial aid packages or
scholarships. This body, Mr. Speaker, has attempted in the past to ease
the financial burden. Back in 1997 Congress passed and former President
Clinton signed into law the Taxpayer Relief Act of 1997. This
legislation created the Hope Tax Credit as well as the Lifetime
Learning Tax Credit to help families afford the cost of sending a child
to college.
Since then we have built on our work. We have added to the success of
the 1997 bill. We have expanded education savings account. We have made
prepaid tuition plans more attractive, and we have expanded the student
loan interest deduction.
When the merits of the Hope Credit and the Lifetime Learning Credit
were being considered back in 1997, the potential compliance costs for
colleges and universities were raised as a potential drawback. In fact,
I recall and probably the gentleman from Maryland (Mr. Cardin) may
recall the particular hearing we had in front of the Committee on Ways
and Means and the former Treasury Secretary was appearing before us,
and I asked Mr. Rubin about the compliance cost. We had been alerted to
some potential substantial administrative burdens that colleges and
universities were going to have to undertake, even while implementing
this worthwhile legislation. I recall the answer that Mr. Rubin gave;
he felt it would be a small, insignificant cost.
{time} 1745
In fact, I think he said it would be the cost of a pencil and a piece
of paper. Well, as C-SPAN was covering that hearing live that day, the
phone lines in our congressional office began to light up as school
administrators from around the country began to call, again with this
concern about this burden, this compliance cost that they would have to
undertake if, in fact, we enacted the HOPE scholarship or the HOPE tax
credit, as well as the lifetime learning credit and, unfortunately,
their premonition has been borne out. It has been clear that our
Nation's institutions of higher learning have faced significant
increased administrative burdens, which brings us today.
The bill before us, H.R. 3346 that has been introduced by the
gentleman from Illinois (Mr. Manzullo), accomplishes the goal of
reducing administrative burdens on schools, while retaining the
integrity of the HOPE and lifetime learning credits. We accomplish this
by modifying how tuition amounts are reported and also eliminating an
unneeded reporting requirement in current law that colleges and
universities provide the Internal Revenue Service with the name,
address, and taxpayer identification number of taxpayers who could
claim students attending the school as dependents. While these
[[Page H8802]]
changes may seem minor, I can assure my colleagues that they will
greatly reduce the administrative burdens on our colleges and
universities. I urge this body to be supportive of H.R. 3346.
Mr. Speaker, I reserve the balance of my time.
Mr. CARDIN. Mr. Speaker, I yield myself such time as I may consume.
First let me thank the gentleman from Missouri (Mr. Hulshof) for
bringing forward this legislation. I agree with him that this is an
important bill that helps us move forward on making it easier for
families to afford college education and reducing the administrative
burden of tax laws. I also want to congratulate the gentleman from
Illinois (Mr. Manzullo) for bringing forward this bill. It is his
legislation. I thank him for putting together a sensible bill that will
reduce the costs of compliance without raising the level of potential
abuse. That is what we all try to do.
First, Mr. Speaker, this bill makes it easier for families to be able
to have the HOPE scholarship and lifetime learning tax credit which
this body, this Congress, passed in 1997, that allows up to a $1,500
tax credit for higher education expenses. The gentleman from Missouri
(Mr. Hulshof) is correct. Education is a very important part of the
American dream. We want to make it easier for American families to
afford higher education. We want all Americans who can benefit from
higher education to be able to afford higher education for their
children, and the HOPE scholarship and lifetime learning tax credit
carries out that commitment.
Mr. Speaker, many times Congress, in well-intended legislation,
causes burdens to the private sector that are not really necessary. We
are well intended in what we think is necessary in order for
compliance. I remember working with the gentleman from Cincinnati, Ohio
(Mr. Portman), on IRS reform, and one of our principal objectives was
to make the Tax Code easier to understand and to make it simpler for
people to comply with the laws that we passed. This bill does that.
This bill makes it easier for compliance.
The first part on reporting, the current law makes it difficult for
some colleges to be able to report the dollar amount that is impacted
by the credit. We make it a little bit easier by allowing the college
to report the amount of expenses or the amount that is paid. It is a
simple change, but it allows a lot of colleges to allow their current
computer program to be adequate to deal with the reporting needs of the
Federal Government, rather than requiring them to change their entire
system in order to meet the needs of the tax credit. That is common
sense.
The second is the reporting of the taxpayer identification number. We
already have the taxpayer identification number of the student, and
that is all we really need because we can match that, and the IRS has
indicated they can match that, rather than requiring a reporting number
of the person who claims the child, adding to the complexity again, and
adding to information that is not readily available by the college and
university that is reporting the information to the government.
So the changes that are made in the legislation are common sense.
They make it easier for the colleges and universities to comply with
reporting requirements. It does not add to the potential abuse of tax
law and it makes it easier for the law that Congress passed in 1997 to
be utilized by American families. It is a bipartisan bill. It is a bill
that I hope every Member of this body will support.
Mr. Speaker, I reserve the balance of my time.
Mr. HULSHOF. Mr. Speaker, I yield such time as he may consume to the
gentleman from Illinois (Mr. Manzullo), the author and original sponsor
of this legislation.
Mr. MANZULLO. Mr. Speaker, of the many Federal regulations with which
colleges and universities are required to comply, one of the most
onerous is that associated with the HOPE scholarship and lifetime
learning tax credit. Originally enacted as part of the Taxpayer Relief
Act of 1997, the tax credits were intended to give parents back more of
their hard-earned money, up to $1,500 for the first 2 years of college,
so that they could better afford to send their children to school.
While we were successful in providing this tax relief for students
and families, we discovered an unintended consequence: an unfunded
mandate burdening colleges, trade schools, community colleges, and
universities in the form of a reporting requirement administered by the
IRS.
I became aware of this regulatory issue during the fall of 1997. I
was discussing several concerns with Dr. La Tourette, president of
Northern Illinois University. While talking about the merits of the
HOPE scholarship, he dropped the bombshell on me and informed us of the
new Federal requirements forcing all 6,000 institutions of higher
education in this country to collect unprecedented information on their
students and disseminate that information to the IRS.
I knew compliance with the reporting requirement would be expansive
and expensive and would ultimately be borne by the very families that
they were trying to help with the HOPE scholarship program. Both large
and small institutions have been hit hard by the reporting requirement.
The cost to schools to implement and abide by these regulations will
soar into the hundreds of millions of dollars. And, of course, they
will be passed on to the consumers of education, which are the parents
and the students.
Since my conversation with Dr. La Tourette, I have worked with
members of the higher education community and with Commissioner Charles
Rossotti of the IRS to simplify the reporting requirements and ease the
burden of the regulations on the colleges and universities of this
country. Today, I am proud to say that H.R. 3346 is the product of a
partnership that evolved between the IRS, the Treasury Department, the
higher education community, and myself, and this can serve as a model
for how we can positively impact higher education in the future by
working together.
Specifically, while H.R. 3346 maintains the reporting requirement,
the bill eliminates certain elements of the law such as reporting a
third party's Social Security number, and changes others, such as
allowing schools to report the amount students are billed or the amount
they are paid. It is my hope that the simplifications instituted as
part of H.R. 3346 will make the reporting significantly easier on
colleges and universities.
Early estimates from Northern Illinois University predict that as a
result of the passage of this bill, this school could avoid a one-time
cost of approximately $90,000. This includes the costs of program
computer systems to accommodate requirements included in the original
legislation that are not included in the pending legislation, as well
as what it would cost initially to implement Social Security number
reporting of the taxpayer claiming the student as a dependent.
Additionally, the university would have incurred ongoing costs on an
annual basis for solicitation and data entry of the student-reported
information, and those costs are estimated at $30,000 a year. The
University of California's system expects to save $1 million in the
first year alone as a result of H.R. 3346. Overall, the savings the
schools will attain as a result of this legislation are very
significant. When we consider that most institutions of higher
education would incur costs of similar proportion, the impact is
particularly traumatic.
I would be remiss if I did not take a moment to heartily thank
Commissioner Rossotti with whom we met on no less than three different
occasions in order to fashion this legislation. I also want to thank
Curt Wilson and Beverly Babers of the staff. I would like to thank
Northern Illinois University, both former president Dr. La Tourette and
current president Dr. John Peters and Kathe Shineham from the school
for their insights and efforts as we have worked to craft this
legislation. This bill is a memorial to Dr. Ruth Mercedes-Smith, former
president of Highland Community College, who was killed in a car
accident several months ago. Her support for our work was invaluable.
Also, Dr. Chapdelaine of Rock Valley Community College and Dr. LaVista
of McHenry Community College, and the National Association of Colleges
and Universities Business Offices. All of these groups worked
tirelessly together in order to craft the legislation. It took
[[Page H8803]]
us 4 years to do it. During that period of time, the IRS worked with
us, they withheld the implementation of these regulations because they
knew that the goal was worthy. Lastly, I want to thank Sarah Giddens of
our staff who, for 4 years, tirelessly worked on this legislation,
dogging it dot by dot, i by i, in the hundreds of meetings, literally,
that she had and the hours that she poured into this piece of
legislation.
Mr. Speaker, it is a great piece of legislation. Instead of spending
money on regulatory compliance, the schools can spend that money doing
what they do best, and that is educating the kids.
Mr. CARDIN. Mr. Speaker, it is my pleasure to yield 5 minutes to the
gentlewoman from Florida (Mrs. Thurman), a distinguished member of the
Committee on Ways and Means.
Mrs. THURMAN. Mr. Speaker, I thank the gentleman for yielding me this
time, who may have to watch my university play in the Orange Bowl. We
were just discussing that over here. But I want to say to the gentleman
from Illinois (Mr. Manzullo) how welcome this piece of legislation is.
I do not know if my colleagues are reading what is happening in Florida
right now, but the legislature is in a special session specifically for
the purpose of cutting their budgets. The headline news in Florida is
that the State universities were hit with cuts in excess of $100
million, while community colleges must deal with $33 million.
As the gentleman from Missouri (Mr. Hulshof) has said, one of the
things that makes our country great is the ability for us to have an
educated population. What we did in 1997 in providing the $1,500 tax
credit for the HOPE scholarship and the lifetime learning tax credits I
was hoping would not be taken away from by the administrative
nightmares that they might be facing, as my colleagues can imagine,
also based on the numbers that we heard of the increased tuition. I do
not know where those monies are going to come from when they cut them,
but certainly we did not want them to have to be raised in tuition.
With the gentleman's help, we are going to be able to see this $1,500
and the bureaucracy cut so that our universities and our community
colleges are not going to have to be hiring new staff and setting up
new computer programs, so this might help them in looking at their
overall budgets if we get this passed and through over in the Senate.
{time} 1800
I just want to say that, in conclusion, because of the work and the
people that the gentleman has recognized, this is a work that the
higher education community has asked for. They have asked for the
greater flexibility in reporting information to the IRS about the
education tax credits. I believe that H.R. 3346 provides that requested
flexibility through the simplification of the Tax Code.
I might just say, for all of us who serve on the Committee on Ways
and Means, that it is always a pleasure for us to be able to come to
the floor and talk about the idea that we are simplifying, and not
adding to, the tax codes in this country.
I think it is something that the American people want us to be doing,
have suggested that we do; and as we can see, as we work in a
bipartisan manner, in fact we can provide not only the dream for our
students and to help our universities, but we can also help the
taxpayers of this country. So we thank the gentleman for his
leadership.
Mr. HULSHOF. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I have a few concluding remarks.
First, I want to amplify a point that my friend, the gentleman from
Maryland (Mr. Cardin), made regarding the situation regarding the
computer systems.
The point is that as educational institutions begin to raise some
concerns that these new reporting requirements would require their
schools to completely revamp their computer systems at a substantial
cost, these institutions noted that complying with the law's
requirement to report tuition payments received would be difficult, and
that because schools keep a running total of the payments that they
receive from students, in other words, payments are not applied
separately to tuition, but instead are applied to a student's total
outstanding balance that may include room and board, books, student
fees for recreational activities, or other costs, and, moreover,
payments are not applied to any particular academic year. As a result,
these institutions would have had to change their accounting and
computer systems dramatically to make them compatible with reporting
requirements. We have undertaken, instead, a change in those reporting
requirements so those colleges and universities will not have to
undertake that substantial cost.
As a final comment, I would just advise my colleagues that in the
1999 calendar year, the Hope scholarship credit was claimed by
3,334,000 students; the lifetime learning tax credit was claimed for
3,575,000 college students.
Clearly, the work we have done here in Congress back in 1997 has
taken a large step forward as far as making higher education more
affordable. I think we are taking an additional step forward for the
administrators of these colleges and universities by reducing their
burden.
Mr. CARDIN. Madam Speaker, I yield myself the balance of my time.
Madam Speaker, let me just concur with my friend, the gentleman from
Missouri (Mr. Hulshof).
Also, I would like to compliment the Internal Revenue Service. We do
not often say that. But they have worked with us to implement, as the
gentleman from Illinois (Mr. Manzullo) has pointed out, this part of
the code in a taxpayer-friendly way. If we look at the 1098-T form and
8863 form, I think we will find both of those forms are easy for the
taxpayer to use.
They worked with us to modify the law in regard to the unnecessary
burden upon the institutions of higher education. As a result, we have
had, I think, the right spirit in simplifying the Tax Code to carry out
the purposes of Congress.
This legislation is important legislation, and I urge my colleagues
to support it.
Mr. HULSHOF. Madam Speaker, I urge adoption of H.R. 3346, and I yield
back the balance of my time.
Mr. CARDIN. Madam Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mrs. Biggert). The question is on the motion
offered by the gentleman from Illinois (Mr. Manzullo) that the House
suspend the rules and pass the bill, H.R. 3346.
The question was taken; and (two-thirds having voted in favor
thereof) the rules were suspended and the bill was passed.
A motion to reconsider was laid on the table.
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