Regular Loan Payments
Participants are responsible for making any required loan payments prior to receiving an LRP award. For example, if you are awarded an LRP contract in April but
you do not begin work until August, you must continue to make your regular loan payments until August. While receiving LRP payments, participants must provide
payment records as verification that their approved loan debt is being repaid with LRP funds.
LRP payments are taxable income and are reported to the IRS. The LRP pays 20 percent of federal taxes and participants are responsible for paying the balance,
as well as any applicable state and local taxes. IHS will send you a Form W-2 Wage and Tax Statement each year reflecting the total amount of loan repayment
funds you received and the amount of federal income and FICA tax withheld
Payment of any Federal Debt
If you are delinquent on any federal debt, you must prove, through lender documentation, that you have negotiated a repayment schedule or that the debt has been paid in full.
Federal debt includes delinquent federal income taxes, audit allowances, federally guaranteed (or insured) loans, federal-direct loans and other miscellaneous federal administrative debts.