March 19, 2004

Colleges Fear IRS Plan Could Make More Students Liable for Social Security Taxes

By MICHAEL ARNONE

Tax officials at many colleges fear that a rule change proposed by the Internal Revenue Service could cost colleges millions of dollars by making nearly every student employee subject to Social Security taxes.

The revision would narrow the definition of "school, college, or university" by requiring education to be an organization's main goal. It would also narrow the definition of "student," disqualifying anyone who often works more than 40 hours a week, receives benefits, uses

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