I was in college for most of this year, and I'm trying to get either
the Lifetime Learning Credit or the tuition deduction on my taxes. My
problem is that there is some confusion over what should have been
reported in tax year 2002 and what goes in tax year 2003.

Here are some dates:
December 25, 2002: I get a bill for $9,000 in tuition for winter quarter 2003.
January 5, 2003: A scholarship check arrives to cover $8,000 of my
tuition for winter quarter 2003.
March 25, 2003: I get a bill for $9,000 in tuition for spring quarter 2003.
April 5, 2003: A scholarship check arrives to cover $8,000 of my
tuition for spring quarter 2003.

According to IRS form 8863, page 2, in the "Tax-Free Educational
Assistance and Refunds of Qualified Expenses" section (
http://www.irs.gov/pub/irs-pdf/f8863.pdf ), the rule is that
scholarships should be treated in the same tax year as the bill they
helped cover. Therefore, my winter quarter tuition and scholarship
both belong on my 2002 taxes, and my spring quarter tuition and
scholarship go on my 2003 taxes.

My problem is that my school sent the IRS a Form 1098T which shows my
2003 tuition payments as $9,000 and my 2003 scholarships as $16,000.
Basically, it looks to me like they didn't read the fine print on Form
8863, and they put my winter quarter scholarship into the 2003 tax
year. This is the first year they've sent out a Form 1098T, and they
don't seem very well organized.

I called the IRS help line, and they basically said, if I think the
1098t is wrong, I can put whatever I think is right on my 1040, but I
should expect to get audited if the numbers disagree.

So my questions are:
1) Am I right in thinking that the 1098t shouldn't have included my
winter quarter scholarships?
2) If so, what should I do? What's the best way to deal with the
disagreement between the 1098t and the numbers I'll be putting down?