IRS Misses Crucial Data in Overseeing the Tax Credits of Obamacare
A report released by the new government says that IRS is being hindered by inadequate information from the market places of health insurance as it makes efforts in overseeing individual tax breaks for those in the Affordable Care Act.
The report originating from the Government Accountability Office established that IRS requires strengthening the oversight of these tax provisions.
The ability of IRS was limited by incomplete data as well as delay in the market place in matching the claims of tax payers for the premium tax credit and market place data at the time the tax returns were filed. Data for the entire marketplace in covering year 2014 was due in January to the IRS but because of delays in the market place in data transmission and technical failures, the IRS got full data available for verifying PTC claims of tax payers.
The IRS is not certain if these challenges will be for one year or it is a continuous problem as noted by GAO. As per the IRS officials, IRS is responsible for checking the formatting but does not check the data. Even if contingency plans were implemented for compensating any data that was inaccurate and missing, the tax payers found them more burdensome.
The 2014 tax year marked the first time that tax payers were expected to report information on health care coverage regarding their tax returns. Tax payers reported if they had coverage on health care or there was a tax penalty owing.
Many of the taxpayers who got coverage through the market place of health insurance were entitled to an advanced premium tax credit in order to ensure that their coverage id affordable. Customers at the market place may choose to have the PTC paid in advance to their companies of insurance. They can also claim all the credit after filing their tax returns.
In January 2015, the IRS started verifying the premium tax credit for tax payers who are using the marketplace data on advance payments on enrollments. In checking coverage, the IRS uses the process of the standard examination, information on shared responsibility and exemption that is reported by tax payers.
The overall goal of IRS is to effectively and efficiently enforce tax laws compliance, reduction of tax burden and encouraging voluntary compliance.