FSA advises schools of actions that they are encouraged to take when any of comment codes 361 through 368 are included on a student’s ISIR in an Electronic Announcement posted to the IFAP Website on May 15, 2014.
As noted in the 2014-2015 Summary of Changes for the Application Processing System Guide posted to IFAP on December 20, 2013, new tax return filing status questions were added to the 2014-2015 Free Application for Federal Student Aid (FAFSA). The corresponding ISIR/SAR comments (ISIR comment codes 361 through 368) were established to alert institutions when the marital status and the tax filing status reported on the FAFSA for the student or parent indicate a possible error. For example, when the reported tax filing status is married (filing jointly or filing separately) and the reported marital status is single, an institution’s review would likely identify an error since the only possible marital statuses for someone who filed a tax return for the prior year as married are married, widowed, divorced, or separated. Single (or never married) would not be a correct marital status for someone whose tax filing status was married.
Of course, there are situations where what looks like an inconsistency between tax filing status and marital status is not an error. Consider a case where the applicant married after the end of the tax year on December 31 but before the FAFSA was completed. This applicant would have correctly reported a tax filing status of single and a marital status of married. This case points out the second reason for these new comment codes. While the two statuses in the example are correct, the applicant may not have included on the FAFSA information from the spouse’s tax return but only information from his or her return. Similarly, an applicant who correctly reported a tax filing status of married and a marital status of divorced, because the divorce was after the end of the tax year on December 31 but before completion of the FAFSA, may have incorrectly reported on the FAFSA income and other information from the joint tax return instead of excluding income and other information of the former spouse.
These new comments were added because FSA believes that these and similar errors could be a fairly common occurrence. While FSA determined that including these new comment codes on the ISIR might suggest incorrect information, it is not considered to be conflicting information. This is why schools are encouraged, but not required, to review the applicant’s record when any of these comment codes are included on the ISIR to determine if the reported statuses are correct and that the correct income and other information were reported on the FAFSA. Institutions may decide to review applicant records with these comment codes on a case-by-case basis.
If based on these comment codes, an institution chooses to review an ISIR and determines that the reported statuses, income, and other information are correct, it must simply annotate that determination in the student’s file or institutional record. However, if the institution determines that either or both of the FAFSA reported statuses are incorrect or that reported income and other information are incorrect, it must submit any required changes to the Central Processing System (CPS) and maintain supporting documentation.
Note that in instances where an institution determines that the reported tax filing status and marital status are not in error, but a change to income and/or other information is submitted to the CPS, the comment code will still appear on the resultant CPS transaction.