Transcript Slide 1
FAFSA ON THE WEB,
IRS DATA RETRIEVAL,
& VERIFICATION
MSFAA
Lansing, MI
February 1, 2012
FAFSA ON THE WEB
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FAFSA PROCESSING
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Increase in applications completed by independent
students is nearly double the increase of applications
completed by dependent students.
Applications by independent students in 2011-2012
have increased nearly 70% when compared to 20102011 rates
Applications by dependent students are up 37% this
year over last.
Nationally, applications have increased by 12% for
families whose income level is greater than $41K,
compared to an increase of 7% for families whose
income level is less than $41K.
FOTW COMPLETION TIME
32:53 min:sec
38%
2010-2011
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23:17 min:sec
2011-2012
2012-13 WEB
DEMONSTRATION SITE
• FAFSA on the Web and FAA Access
demonstration sites available
To access sites, go to http://fafsademo.test.ed.gov
Enter:
User Name: eddemo
Password: fafsatest
• Click on FOTW or FAA Access to CPS Online
Demo System button
• Available through December 2012
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An Alerts and Message
text provides the status
of the search
Search results display
name, city, state, and
school code for each
matching school
Scrollable results display
as many as 100 schools
per page
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Students select
schools from those
that display and then
select the “ADD”
button between the
two tables.
The student can also
select the Remove
hyperlink to remove
any school from the
listing.
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2012-2013 HOUSING PLAN
ERROR MESSAGING
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2012-2013 HIGH SCHOOL QUESTION
High school question (Question 27) will display
using the following logic:
High school completion status = 1 (high school
diploma) and Grade level = 0 or 1
Any student who was presented the high school
question in 2011-2012 will be presented the
question again in 2012-2013 as a renewal
student.
The student will have the opportunity to search
the database with the “best match” search
functionality to verify the response that was
provided in 2011-2012.
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Results for this high
school search
include any school
name in the
database which
contains “Bishop”,
may be located in
Baltimore or in the
state of Maryland.
This is an example
of relevance as
those names
containing Bishop
appear before those
containing city or
state.
Students may
narrow their search
by changing the
search criteria.
FAFSA GENDER QUESTION EDIT
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2012-13
While the gender question is not required, it is
used to determine which applicants need to be
matched with the Selective Service
To provide an extra reminder to applicants, a
warning edit will display in FOTW if the
question is not answered
ASSET THRESHOLD QUESTION
2011-2012
Comment
codes
are used to notify
schools when the
asset threshold
question was
displayed to the
applicant and the
response is “No”
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2012-2013
Comment
codes
deleted
Response to asset
threshold question
provided on ISIR
record layout,
Student Inquiry,
and ISIR Compare
WHO SEES ASSET
THRESHOLD QUESTION?
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Independent students and parents of dependent
students that
Are not eligible for automatic zero or Simplified
Needs Test AND
Report state of legal residence that allows skip logic
for income and assets
MI – does allow
OH – does not allow
MN – does not allow
WI – does not allow
IL – does not allow
IN – does allow
HOMELESS YOUTH DETERMINATION
Financial
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Aid office may determine that
student meets homeless youth definition
Students who meet this criteria can use
FOTW to set the Special Circumstances
Flag to ‘3’
HOMELESS YOUTH DETERMINATION
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IRS DATA
RETRIEVAL
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IRS DATA RETRIEVAL
IRS Data Transferred between January 30, 2011 & July 2011
•Initial FAFSA -- 2,617,428
•FAFSA Corrections -- 334,306
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10%
IRS Data Unchanged
IRS Data Changed
90%
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IRS DATA RETRIEVAL
2012-2013 FOTW will include logic to make
the determination for the applicant
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2011-2012 FOTW relies on the applicant’s
determination of whether the IRS DRT should
be used
FOTW CONFIRMATION PAGE
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Upon submission, reminds students that the
IRS data retrieval option is the preferred
method of providing tax information and is
available through Corrections on the Web
Customized messaging displays –
When student and/or parent was eligible to
use the IRS data retrieval and did not OR
When student and/or parent indicated “Will
file taxes”
2012-2013 IRS DRT
FILTERING QUESTIONS
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The student and parents, when applicable, are
required to respond to the following filtering
question.
Check all that apply or check None of the
Above.
My tax filing status is Married Filing
Separately
My tax filing status is Head of Household
I filed an amended tax return
I filed a Puerto Rican or foreign tax return
I recently filed my taxes
None of the above
2012 – 2013 IRS DRT LOGIC
The “My tax filing status is Married
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Filing Separately” and “My tax filing
status is Head of Household” options
are displayed only when the students or
parents, when applicable, are married.
DYNAMICALLY DISPLAYED IRS DRT
MESSAGING
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If an applicant selects recently filed my
taxes, he/she will still have the option to use
the IRS DRT, although it is discouraged if it
has been fewer than two weeks.
• Message: “If you filed your taxes
electronically within the last 2 weeks or if
you filed your taxes by mail within the last
8 weeks, your tax information may not be
available yet from the IRS. You can
determine if you should attempt to access
your tax information from the IRS at this
time.”
DYNAMICALLY DISPLAYED IRS
DRT MESSAGING
An applicant will receive the message, “Based
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on your response, you are not eligible to
transfer your information from the IRS into
this FAFSA.”
Those who select “None of the Above”, would
be encouraged to use the tool.
Message: “Based on your response, we
recommend that you transfer your
information from the IRS into this FAFSA. “
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TWO NEW IRS DATA FLAGS
FOR 2012-2013
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IRS Data Retrieval
Eligible Filer Notifications
Students and parents who were eligible to use
the IRS data retrieval and did not will receive email notification
E-mails will be sent beginning on 04/01/12
Subsequent messages sent every 45 days until
mid-September, and then every 60 days until
the end of cycle
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NEW IRS DRT NOTIFICATIONS
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Two types of IRS DRT email notifications to
encourage certain applicants, and their parents, to
use the Tool.
Estimated Tax Filer – Sent to an
applicant/parent who responded that he/she
“Will File” taxes. Encourages use of the Tool
after filing taxes.
Actual Tax Filer – Sent to applicant/parent
who indicated that the tax return was
“Completed” and the individual was eligible to
use the IRS DRT but (1) chose not to use it or
(2) used it but chose not to transfer data.
VERIFICATION
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WHAT IS VERIFICATION?
Process
whereby certain information
provided on the FAFSA is reviewed for
accuracy and completeness
Selected Title IV recipients
Only specific ISIR data elements
668.51 thru 668.61 – Subpart E
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TAX INFO YOU MUST KNOW
Married
couple files separate tax returns and
both filed as “head of household”
IRS allows if spouses lived apart for the
last 6 months of calendar year
Not including separation due to business,
military service, medical care, school
Student and parent both claimed student as
tax exemption
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TAX INFO YOU MUST KNOW
ISIR
says “I’m not going to file.” and gross
income meets IRS minimums
That’s conflicting information!
http://www.irs.gov/pub/irs-pdf/i1040.pdf
scroll to page 8
ISIR
will have reject 20 with comment 126
or 131
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EFFECTIVE DATE OF VERIFICATION
REGULATIONS
Effective
July 1, 2012 for 2012-13 award
year
Remember
12/13 FAFSA processing has
already begun!
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VERIFICATION - DEFINITIONS
Subsidized student financial assistance
programs
Eligibility uses EFC
Verification applies
Pell, FSEOG, FWS, Perkins, Direct Subsidized
Loan
Unsubsidized student financial assistance
programs
Eligibility does not use EFC
Verification does not apply
Direct Unsubsidized Loan & PLUS Loan
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TEACH Grant
VERIFICATION - DEFINITIONS
Use “FAFSA information” instead of
“application”
Specified year
The calendar year preceding the first
calendar year of an award year, i.e. the base
year, or the year preceding the base year
Applicant responsibility
Applicant must provide specified documents
or information if requested by Secretary or
institution
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VERIFICATION SELECTION
CPS applies risk model to FAFSA data
Goal is to target verification based upon
most error prone data items specific to
an applicant
Non-selected applicants are again subject
to risk model when submitting corrections
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VERIFICATION SELECTION
ISIR Flags & Comment Codes
Verification Flag
Y - Selected for verification
N - Not selected for verification
* - Selected on a subsequent transaction
Verification Selection Flag
Blank – corrected transaction not selected
Y - corrected transaction now selected &
transaction being corrected was not selected
Comment Codes
170 & 171
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VERIFICATION SELECTION
2012-13
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Institutions must verify all applicants
selected by CPS for verification
- Removes institution’s option to verify
only 30% of applicant pool
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2012-13 VERIFICATION
& FAFSA CORRECTIONS
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For subsidized programs, all changes
resulting from verification must be
submitted to CPS if change is
- To any nondollar item or
- A single dollar item of $25 or more
If required to submit one change, must
submit all changes
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REQUIRED VERIFICATION ITEMS
2012-13
Regulation eliminates five required verification
items
ED will publish Federal Register Notice each
award year listing possible verifiable items and
acceptable documentation
SAR/ISIR will specify required verification items
for individual applicant
Institution may verify additional items for an
applicant
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2012-13 REQUIRED
VERIFICATION ITEMS
From the 2011 tax return
Adjusted gross income
U.S. income tax paid
Untaxed IRA distributions
Untaxed Pensions
Education credits
IRA deductions
Tax Exempt Interest
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ACCEPTABLE DOCUMENTATION
For items on 2011 tax return
Information obtained through IRS data
retrieval on FOTW
IRS Request Flag value of 02
OR
A tax transcript obtained from the IRS
See DCL GEN-11-13
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TAX TRANSCRIPT SAMPLE
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TAX TRANSCRIPT SAMPLE
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2012-13 REQUIRED
VERIFICATION ITEMS
Not on tax return
Number in household
Number in college
Food stamps – Supplemental Nutrition
Assistance Program (SNAP)
Child support paid
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ACCEPTABLE DOCUMENTATION
Number in household
Signed statement
• Includes name, age, and relationship to
applicant
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EXCEPTIONS TO HOUSEHOLD
SIZE VERIFICATION
For dependent student when parents marital
status is– separated or unmarried (single, divorced, or
widowed) and family size on the FAFSA = 2
– married and family size on the FAFSA = 3
For independent student who is–
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separated or unmarried (single, divorced, or
widowed) with the family size on the FAFSA = 1
married and the family size on the FAFSA = 2
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ACCEPTABLE DOCUMENTATION
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Number in college
Signed statement
Name and age of each household
member who is/will attend eligible
postsecondary educational institution as
at least a half-time student in the 2012–
2013
Name of the eligible institution(s) that
each household member is or will be
attending during the 2012–2013
Not required if applicant is only member in
college
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ACCEPTABLE DOCUMENTATION
Food Stamps - Supplemental Nutrition
Assistance Program (SNAP)
- if receipt is indicated on the 2012-13 FAFSA
Documentation from the agency that issues
the Food Stamps benefit or alternative
documentation as determined by the
institution to be sufficient to confirm that
the applicant received benefit in in 2010 or
2011
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ACCEPTABLE DOCUMENTATION
Child Support Paid - if reported on the 2012-13
FAFSA
Statement signed by child support payor Amount of child support paid
Name of the person to whom child support
was paid and
Name of the children for whom child support
was paid
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TAXPAYER HAS IRS EXTENSION
For 2012-13
Verification is complete if you have -– Documentation of IRS extension for tax year 2011 &
– 2011 W-2 Forms or statement from self-employed
individual
School may require an individual granted a tax filing
extension to provide a copy of their completed and
signed tax return when filed
If school receives a copy of the return, it MUST verify
AGI and taxes paid
If school does not receive copy, may return all funds
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disbursed
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VERIFICATION & PROFESSIONAL
JUDGMENT
For 2012-13
Codifies policy that all applicants selected for
verification must complete verification before
any PJ adjustments to FAFSA or cost of
attendance are made
Refers to HEA section 479A(a)
Statement must be included in school’s
written policies and procedures about
verification
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UPDATING FOR MARITAL STATUS
For
2012-13 you may require updating
due to change in applicant’s marital
status if institution determines update is
necessary to address inequity or
accurately reflect ability to pay and
Student is selected for verification
OR
Marital status change results in
dependency status change
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VERIFICATION & INTERIM
DISBURSEMENTS
For 2012-13
• Interim disbursements may be made without
receipt of corrected ISIR if completed
verification makes no change to aid eligibility
• However all required corrections must be
submitted to CPS and school must receive
revised ISIR transaction
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VERIFICATION COMPLETED
AFTER ENROLLMENT ENDS
In 2012-13, student no longer limited to
lesser Pell award if verification completed
after enrollment ends
Student would receive Pell payment based
upon correct EFC
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IRS EXTENSION
You
must verify with documentation of IRS
extension and W-2 Forms or statement from
self-employed individual
School may require an individual granted a tax
filing extension to provide a copy of their
completed and signed tax return when filed
- If school receives a copy of the return, it MUST
verify AGI and taxes paid
If school does not receive copy, may return all
funds disbursed
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TAX RETURN PREPARER
For 2012-13, clarifies that tax
returns submitted with preparer
signature (wet, stamped, typed or
printed) with the name and address
of the preparer must also have their
SSN, EIN, or PTIN
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FUTURE VERIFICATION
In
the future, the ISIR will indicate
Whether an applicant has been selected for
verification, and
Specific item or items that must be verified
But . . . we’re not there yet . . .
2013-14 will
Serve as transition year
Be a “hybrid” of the current and future
verification selection processes
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2013-14 CUSTOMIZED VERIFICATION
Like
current process, applicant data will be
subjected to risk model on 01 transaction
Three categories of selection
Targeted selection - data meets a risk criteria
and record is selected for “targeted”
verification
Discretionary selection - data does not meet
risk criteria for targeted selection, but is
selected to verify a non-targeted data element
Combination of targeted and discretionary 67
selection
2013-14 ISIR
ISIR would include
Verification Flag (Y, N, *)
Fields for all FAFSA data elements subject to
verification for a given year (per FR notice)
Verification codes for each of those data
elements indicating verification selection status
Y = Data element selected for verification
N = Data element not selected for verification
V = Data element selected for verification, but
student transferred data using the IRS data
retrieval tool and did not change it
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2013-14 SAR
Will tell students that they were selected, but
will not indicate the specific fields that need
to be verified
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SUBSEQUENT TRANSACTIONS
Verification selection would generally occur on
initial (01) transactions only
Corrections that are processed after selection would
continue to be flagged as selected
If the student was not selected for verification on
initial (01) transaction, selection status would not
change based on a correction, unless one of the
following occurs
Student’s dependency status changes
Eligibility for Auto Zero EFC is lost
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SUBSEQUENT TRANSACTIONS
If one of these conditions is met on a
correction CPS will apply risk model to corrected
FAFSA information
If applicant meets a risk criteria, will be
selected for verification on the resulting
correction transaction
Verification flag set to Y
FAFSA data elements to be verified
identified on ISIR
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SUBSEQUENT TRANSACTIONS
Sometimes, data elements subject to verification will
change from one transaction to another
Dependency status changes
Tax filing status changes
Student/Parent changes any data items retrieved
from IRS
Student become eligible/ineligible for Automatic
Zero EFC
In these cases –
Verification flag would remain Y
New verification tracking flag = R
Reset verification indicators for appropriate data
elements (Y, N, V)
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SUMMARY OF CUSTOMIZED
VERIFICATION
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Verification selection will generally occur on 01
transactions only
Some applicants will get selected for verification
on subsequent (02 or higher) transactions but
should be small number
CPS will determine which FAFSA data
elements must be verified for individual
students
Specific data elements requiring verification
for each transaction will be communicated on
ISIR
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FAFSA INFO NOT
RELATED TO
VERIFICATION
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WHO IS A PARENT ON THE
FAFSA?
ONLY biological or adoptive parents
Not legal guardians
Not foster parents
Step-parents must be included if
Currently married to biological or
adoptive parent
Not married to biological or adoptive
parent but has legally adopted student
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FAFSA HOUSEHOLD
Siblings of dependent student are included in
the parents’ household if
Parent will provide more than 50% of support
for sibling during award year
OR
Sibling would be dependent if filed FAFSA
Foster children are not in the household and
foster payments are not income
Independent Student’s boyfriend/girlfriend
Only if student provides more than 50% of
support for friend and will do so during award
year
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TIDBITS
In-kind support is not untaxed income on
FAFSA
Examples – support other than money
Food
Clothing
Living rent-free
Federal law defines marriage as legal
union of man and woman
Same-sex couples cannot be married on
the FAFSA
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CONFLICTING INFORMATION
Requires that the institution
“communicates to the individual
designated to be responsible for
administering Title IV, HEA programs, all
the information received by any
institutional office that bears on a
student’s eligibility for Title IV, HEA
program assistance
668.16(f)
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CONFLICTING INFORMATION
Develops and applies an adequate system
to identify and resolve discrepancies that
the institution receives from different
sources with respect to a student’s
application for financial aid under Title
IV, HEA programs
Applies to ALL Title IV recipients and any
information that affects Title IV aid
eligibility
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WHAT IS NOT CONFLICTING
INFORMATION?
Household size differs from number of tax
return exemptions
Dependent under IRS rules vs.
Department definition of dependent
Assumptions made by CPS
FAFSA filed using estimated income
W-2 Box 14
Tax filer claimed multiple or conflicting
credits
Secondary INS confirmation successful
but student has expired INS document
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QUESTIONS????
What did she
say????
I was
thinking
Jamie A. Malone
Training Officer
U.S. Department of
Education
312-730-1528
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[email protected]
PLEASE PROVIDE ANY COMMENTS
REGARDING THIS TRAINING OR THE TRAINER
TO:
Jo Ann Borel
Title IV Training Supervisor
[email protected]
202-377-3930
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