John Pearson, the Director of the Bechtel International Center, and Kelly Wright, the Director of Payroll, sent an email last Tuesday updating international students who have been impacted by an Internal Revenue Service (IRS) error involving tax returns. The errors, which have led to decreased tax refunds and temporarily frozen assets, originate within the IRS and not Stanford, and the error has also occurred at other institutions across the nation.
“We wish we had some final, specific news and a process whereby individual returns from last year can be fixed. Unfortunately, so far, we do not. What we do know is that the Internal Revenue Service has agreed to review the means by which they matched individual tax returns with the withholding submissions provided by institutions,” the email stated.
While the review proceeds, students such as Vignesh Iyer, a Ph.D. candidate in engineering who hails from India, remain waiting for a resolution to their tax problems.
Iyer filed for a tax refund last April and expected to receive one by July. When he did not receive the refund, he contacted the IRS. In September, the IRS sent him a letter asking him to wait six more months; however, in February, the IRS sent him a letter indicating that there was a discrepancy between the amount entered by the Stanford payroll office and the amount he had entered, so the IRS could not process his tax refund. In fact, the IRS asked Iyer to pay an extra amount on top of what he had already filed.
Iyer then consulted Bechtel, where he discovered that at least seven or eight other students had had similar problems. Bechtel then contacted Glacier Tax Prep, the software used by many Stanford students to file taxes. Both the Stanford payroll office and Glacier drafted letters to send to the IRS stating that there was no discrepancy between entered amounts of both parties.
However, Iyer’s problem remains unsolved.
“A couple of days ago, I received another letter from the IRS asking me to wait another month,” Iyer said.
Tomo Sugimoto, a third-year Ph.D. student in the anthropology department from Japan, had a similar experience with his tax return. He reached out to the University after receiving a letter in February regarding his 1042-S forms and a bill from the IRS for approximately $4,000.
Sugimoto started an online petition urging the University deal with the problem in a more transparent and active manner. The petition has garnered over 200 signatures.
“I initially didn’t know this was an issue impacting many other students not only at Stanford but also at universities all around the nation and all I could do was [panic] and get frustrated,” Sugimoto said. “I only found out other students are also affected when I luckily came across Yale’s international student center website as well as memorandums issued by UChicago and UPenn explaining this issue in detail.”
Some demands were for the University to “immediately inform all international students that could be affected by this crisis” and “accommodate international students due to delay in their 2014 tax returns: the [University] will offer emergency financial support and cancel rent frees for housing for those affected.”
After Sugimoto started the petition, there was a meeting at Bechtel for impacted students.
Oded Zipory, a Ph.D. student in the School of Education, attended the meeting and estimates that there were about 10 people present.
“It was a pleasant meeting. Nobody was angry,” Zipory said.
Unlike Iyer and Sugimoto, Zipory, who hails from Israel, did receive a tax refund, but it was about half of what he had expected. To help Zipory, Stanford also gave him a letter to send to the IRS stating that there was no mismatch on his 1042-S form as well.
However, Sugimoto believes the University should have alerted international students about potential problems regarding their tax refunds.
“I still believe Stanford should have more proactively contacted [international students] about this issue, since if they hadn’t informed us, how else should we have found out? I shouldn’t have gone to other universities’ websites to find out,” Sugimoto said.
Sugimoto thinks that it may take a few months for the IRS to resolve the problem.
“After all, they took a year to respond to my 2014 tax return,” Sugimoto said.
If a student receives an IRS Letter 105C or 916C or a Notice CP49, CP501, or CP503, Pearson and Wright encourage students to contact payroll for a letter to send to the IRS regarding the lack of discrepancies. Additionally, Pearson and Wright state in their email that the student should call the IRS Accounts Management division at the general taxpayer hotline at 1-800-829-1040 to request an 8-12 week hold on their 2014 tax accounts.
Contact Anne-Marie Hwang at amhwang ‘at’ stanford.edu.