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Treasury Inspector General for Tax Administration

Press Release


March 6, 2017
TIGTA - 2017-02
Contact: Karen Kraushaar, Director of Communications
Karen.Kraushaar@tigta.treas.gov
(202) 622-6500

Affordable Care Act: Verification of Premium Tax Credit Claims During the 2016 Filing Season

WASHINGTON — The Internal Revenue Service (IRS) accurately determined the amount of allowable Premium Tax Credit (PTC) under the Affordable Care Act on more than 97 percent of tax returns reviewed during the 2016 Filing Season, according to an audit report published today by the Treasury Inspector General for Tax Administration (TIGTA).

The report found that, as of May 1, 2016, the IRS accurately determined the amount of the credits on 4.7 million out of 4.9 million returns. For the remaining 154,744 tax returns, either programming errors resulted in an inaccurate PTC computation, or high-risk tax returns were not identified as potentially erroneous because the discrepancy amount was below the dollar tolerance for which the IRS will review a claim, TIGTA auditors found.

The Affordable Care Act created the refundable PTC to help offset the cost of health care insurance for those with low or moderate incomes. The objective of TIGTA’s review was to evaluate the effectiveness of the IRS’s verification of PTC claims during the 2016 Filing Season. TIGTA also found that, while Exchanges provided required data for use by the IRS in verifying PTC claims more timely, some delays still occurred.

TIGTA’s audit recommendations include working with the Exchanges to ensure that they submit the required data to the IRS timely, modifying systemic PTC verification processes to include Form 1095-A data, and updating verification processes that resulted in individuals receiving potentially erroneous PTC.

Read the report.

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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.