Treasury Inspector General for Tax Administration
August 5, 2014
TIGTA - 2014-16
Contact: David Barnes
WASHINGTON -- The Internal Revenue Service (IRS) is generally providing accurate income and family size information to Health Insurance Exchanges for use in determining eligibility of individuals for health insurance and the Advance Premium Tax Credit, according to a new report from the Treasury Inspector General for Tax Administration (TIGTA).
Beginning Jan. 1, 2014, most individuals must obtain health insurance that meets minimum requirements. Health Insurance Exchanges are intended to provide a place for Americans to shop for health insurance. Qualified individuals may request the Premium Tax Credit to assist with paying for health insurance. The credit may be paid directly to individual’s health insurance provider as a partial payment for their monthly premiums. This is known as the Advance Premium Tax Credit (APTC).
This audit was initiated to ensure that the IRS is providing accurate information to the Exchanges to assist in determining an individual’s eligibility to use the Exchange and receive the APTC.
“In nearly all instances, the IRS correctly provided accurate information to the Health Exchanges on income and family sizes,” said J. Russell George, Treasury Inspector General for Tax Administration. “Accurate information is essential for an Exchange to determine if an applicant is eligible to obtain insurance coverage through the Exchange.”
TIGTA’s review of the IRS’s response to 101,018 Income and Family Size Verification information requests between Oct. 1 and Oct. 4, 2013 showed that the IRS, based on the information provided by the Exchange, provided accurate responses for 100,985 (99.7) percent of the 101,018 requests.
However, TIGTA identified 33 requests for which the IRS incorrectly notified the Exchange that it could not provide requested tax information for individuals because the IRS was unable to match the name on the application to IRS data records. These responses were incorrect because the individual’s name used on the application was in fact available in IRS data records. This resulted from a programming error in which IRS data did not always contain the most recent name information showing on the individual’s tax account.
In addition, TIGTA found that the IRS, based on information furnished by the Exchange, accurately calculated the maximum monthly APTC for 120,824 requests received between Oct. 1 and Oct. 14, 2013.
TIGTA recommended that the IRS’s Chief Technology Officer ensure that IRS data records used to provide responses to Exchange requests accurately reflect an individual’s most recent name information contained in IRS data. The IRS agreed with TIGTA’s recommendation and stated that it has already implemented programing modifications so that name information fields are now consistent with the most recent name information on the individual’s tax account.
Read the report.
Note: The difference between the date TIGTA issues an audit report to the Internal Revenue Service and the date TIGTA publicly releases the report is due to TIGTA's internal review process to ensure that public release is in compliance with Federal confidentiality laws.
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