I think this is a flaw in the current filing process, how about the following workaround? Suppose you received 10,000 distribution all of which are used for qualified education purpose, but you report that 9,999 are used, this way you report the distribution and will not likely to get an IRS letter. In the future, there should be a process similar to HSA which you file a form even all the distribution are used for qualified medical purpose.