Treasury Inspector General for Tax Administration
May 7, 2015
TIGTA - 2015-15
Contact: David Barnes
WASHINGTON Ė Delays in employer and insurer reporting of health insurance information reduces the IRSís ability to determine whether taxpayers and their dependents have basic health insurance as required under the Affordable Care Act (ACA).
That is the conclusion of a new report publicly released today by the Treasury Inspector General for Tax Administration (TIGTA).
Beginning in January 2014, the ACA requires each individual to have basic health insurance coverage known as Minimum Essential Coverage (MEC) or pay an additional tax which is referred to as a Shared Responsibility Payment (SRP). The ACA allows for exemptions from the MEC requirement. Exemptions can be obtained from a Health Care Exchange or from the IRS.
The objective of this review was to evaluate the status of the IRSís preparations for determining whether taxpayers maintained MEC or met exemption requirements, and its preparations for assessing the SRP during the 2015 Filing Season.
TIGTA found that the Treasury Department has delayed employer and insurer reporting of health insurance information until March 2016. Therefore, the IRS has not developed processes and procedures to verify compliance with MEC requirements for the 2015 Filing Season.
However, the IRS will assess MEC compliance on Tax Year 2014 tax returns that it identifies through its normal examination compliance activity. To assist tax examiners, the IRS developed a tool to compute the SRP. TIGTA found that this tool accurately computes the SRP. In addition, TIGTA believes the tool would be helpful to taxpayers and should be made available on IRS.gov.
In addition, the IRS plans to use information obtained during the 2015 Filing Season to develop post-processing compliance strategies to be used in future years.
ďAs many taxpayers are unfamiliar with their obligations under the Affordable Care Act, the Internal Revenue Service should provide taxpayers with an online tool to assist them in calculating the amount of the Shared Responsibility Payment owed,Ē said J. Russell George, Treasury Inspector General for Tax Administration.
TIGTA recommended that the Director, Affordable Care Act Office, add an online SRP calculation tool to IRS.gov for the 2016 Filing Season, in a continued effort to provide taxpayers with self-assistance interactive tools. The IRS agreed with this recommendation and plans to assess the feasibility and cost to provide an online SRP estimator tool.
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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