RESPONSIBILITIES OF
PROGRAM PARTICIPANTS
Tax Liability:
Payments made to LRP participants to repay their health education
loans are taxable income and will be reported to the IRS. In addition
to this payment, an additional 20 percent will be sent directly to
the IRS to offset the Federal tax liability, which is also considered
taxable income.
PSC/FMS/DFS/DB/ESPS will send participants a Form W-2
Wage and Tax Statement, reflecting the total amount of
loan repayment and tax payments at the end of the
calendar year. LRP participants should be cognizant that
the LRP makes no provision for the payment(s) of state or
local taxes and are advised to consult with their local
or state tax office, or their financial advisor regarding
the increased liability.
Communication with Lending Institutions:
The verification of debt and the disbursement of loan
repayments is conducted under a Memorandum of Agreement
between the IHS and the PSC/FMS/DFS/DB/ESPS.
PSC/FMS/DFS/DB/ESPS will obtain certifications of
individual outstanding health professions educational
loans from lending institutions. LRP
participants are advised that they are personally
responsible for making any payments which may be required
before the first payments are made by PSC/FMS/DFS/DB/ESPS.
Once payments begin, LRP participants normally should not
have to make additional payments while they are
satisfactorily participating in the LRP. If participants
incur additional charges on their loans due to delay in
payment by the LRP, they will need to provide
documentation and their claim will be considered.
Delinquent on the Repayment of any Federal
Debt(s):
If you are delinquent on the repayment of any Federal
debt, you must provide an explanation on a separate sheet
of paper with your social security number and include it
with your application. Examples of "Federal
debts" include delinquent Federal income taxes,
audit allowances, Federally-guaranteed or Federal direct
loans, and other miscellaneous Federal Administrative
debts. "Delinquent" federally-guaranteed or
insured loans means the Federal Government has
repurchased the loan from a lender because the borrower
breached the loan agreement and is in default; for
Federal direct loans, it means a debt more than 31 days
past due on a scheduled payment.
Please e-mail
questions and comments to Webmaster
(cahhaitt@smtp.ihs.gov).
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