In 2014, the IRS announced that at least 9 million families failed to claim the maximum education-related tax credits every year. Since then, very little has been done to help these recent college students and their parents claim the tax refund money they missed.

It appears that about 20 million Americans would benefit from amending one or two old tax returns to claim an average of more than $1,300 per year. Popular tax software programs often fail to calculate the maximum education credit accurately. Many CPAs are unfamiliar with the challenges and complicated regulations surrounding scholarships, grants, tuition, and education credits. College students and their families rarely hire CPAs, and they don't realize that the "free" tax software they are using is costing them thousands of dollars in missed tax credits.

There is an untapped market in this time of financial insecurity—a wide-open opportunity—for CPAs to step up and help college students and their families claim valuable education tax credits.

Learning Objectives: 

• Identify the standard, less beneficial way that scholarships and grants are typically reported on tax returns


• Recall the statutory and legal support for claiming education credits even when tuition is paid with scholarships or grants


• Identify how to report scholarships and grants to claim education credits legally


• Determine the maximum education credit when scholarships and grants are involved


• Identify the pitfalls, mistakes, and traps for the wary when computing education tax credits


• Determine how to win the battle if the IRS denies the credit or audits the tax return


• List ways to attract new permanent clients from an untapped market of up-and-coming students and their families