Tax Snafu Update: Some Progress, But International Students Still on the Hook

This tax season is shaping up worse than most for international graduate students across the U.S., as they are caught in a costly bind between the IRS and their universities. To the best of our knowledge, at least 197 international students at UChicago alone have been asked to pay additional taxes for 2014. In addition, many are still awaiting their 2014 federal tax refunds, because the IRS claims not to have received the taxes the university withheld.

GSU formed an ad-hoc committee for international students, and following sustained GSU efforts, the administration has been taking some steps to address the tax situation faced by many international students, but the overall situation remains unresolved. GSU representatives have met with administrators twice over this issue, following which the Office of International Affairs (OIA) has been more forthcoming with additional information/updates and tax workshops.

GSU is heartened by the administration’s prompt response to this matter, and by its willingness to meet with GSU members directly to address graduate student problems. However, several concerns remain unaddressed: 1) The university has repeatedly held  that affected students must resolve the issue by dealing with the IRS individually.  Yet, the Columbia administration is dealing with the situation in bulk, suggesting that it is indeed possible!  We call on our administration to follow Columbia’s lead and fix the problem in bulk. 2) While we eagerly await a resolution of this problem, international graduate students face continued financial pressure. Accordingly, we ask that all students who have incurred legal expenses be reimbursed by the university, and that legal services be provided by the university if we are expected to continue dealing with this situation individually. 3) We ask that the university provide financial assistance to those affected.

In the last meeting with the administration, on 20th April, GSU representatives learnt that the IRS had requested information and sample cases from institutions in order to look into resolving the matter. We were told that on Tuesday, 19th April, the university was notified that the IRS did not accept culpability for this error, putting the ball back in the court of insitutions. The next course of action for institutions is to  put pressure on senators in DC, we were told. There is also a Joint Committee on Taxation, and universities are working on communicating with this committee through their DC lobbyists.

In  the meantime, some students have received their refund cheques for 2014! There’s no evident pattern in how this happened — some of these students were in conversation with the IRS, others who hadn’t even pursued their cases with the IRS received refund cheques. For those of us who haven’t received refunds, have extensions/holds that are running out, and/or are receiving additional notices from the IRS, the advice from the university is to continue contesting and not pay anything to the IRS.

 Going forward:

• The administration proposed organizing a letter-writing event with us, where students could come and write letters to the relevant Senators / the Joint Committee on Taxation, asking them to pressurise IRS. However, such a course of action presumes that the fault lies with the IRS, at least primarily if not exclusively; and from what we can tell it is hardly clear that is the case. It appears, that the fault may lie anywhere in-between the university, its vendors and IRS, unless we take any side at its word. Columbia’s example may indeed point otherwise: their grad union succeded in getting the university to promise a solution “in bulk” by working with elected representatives to pressurise the University to act!
• We asked  that the University communicate consistently with international students, stressing the need for weekly or fortnightly updates on the OIA website or via email. We also suggested setting up a discussion board or group so that people can communicate with each other and not feel isolated in this issue.
• Since some students are approaching payment deadlines the admisntration  should provide templates for additional communication with the IRS.
• We have been pushing the adminstration to cover legal fees that students might have incurred while pursuing the matter. While the administration said it could not provide such aid, they promised to  set up more private consultation times with Alejandro Young, the tax lawyer hired by the OIA, so that people have free legal help. GSU reps asked them to advertise this. While we hope this is some help, and will continue to push them to advertise Mr. Young’s availability for consultation, this still does not amount to pro-bono legal help. Moreover, should it be the case that the university is in some way culpable for this situation, the same person who provides them legal counsel is not likely to help us if there is a conflict of interest.
• With potential 2015 refunds deferred due to extensions along with pending refunds from 2014, many students have been placed in a very difficult financial situation. We argued that the university should provide emergency financial assistance, as Columbia University for example has done. Instead, they told us that for people who are deeply affected (financially) by this situation, area Deans of Students  have been intimated of the problem and can give financial help.  Otherwise, the bursar’s office has been informed and can look into coming up with payment plans for students who can’t pay pending bills. Since they have suggested these options, we would recommend students try these routes of redress, though the promise sounds so vague it’s unclear if it will yield anything.

In sum, our organised efforts have yielded much: more information emailed to the student body after studied silence for months, a qualified offer of financial assistance through Deans and through payment plans to allow late payment of fees, offer of individual sessions with the university’s tax lawyer who specialises in taxation for foreign nationals, and a couple of tax workshops where grads could ask questions to the university about how to deal with the situation. Yet as the overall situation remains unresolved, we need to work together and build power as international grad students on campus. Join GSU’s Ad-Hoc Committee for International Students: and onward!